Correlation Between CSL and HEMOGENYX PHARMPLC

Can any of the company-specific risk be diversified away by investing in both CSL and HEMOGENYX PHARMPLC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CSL and HEMOGENYX PHARMPLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSL Limited and HEMOGENYX PHARMPLC LS 01, you can compare the effects of market volatilities on CSL and HEMOGENYX PHARMPLC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CSL with a short position of HEMOGENYX PHARMPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and HEMOGENYX PHARMPLC.

Diversification Opportunities for CSL and HEMOGENYX PHARMPLC

0.06

Correlation Coefficient

CSL  HEMOGENYX PHARMPLC

Significant diversification

The 3 months correlation between CSL and HEMOGENYX is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and HEMOGENYX PHARMPLC LS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMOGENYX PHARMPLC and CSL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CSL Limited are associated (or correlated) with HEMOGENYX PHARMPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMOGENYX PHARMPLC has no effect on the direction of CSL i.e., CSL and HEMOGENYX PHARMPLC go up and down completely randomly.

Pair Corralation between CSL and HEMOGENYX PHARMPLC

Assuming the 90 days horizon CSL Limited is expected to under-perform the HEMOGENYX PHARMPLC. But the stock apears to be less risky and, when comparing its historical volatility, CSL Limited is 105.53 times less risky than HEMOGENYX PHARMPLC. The stock trades about -0.06 of its potential returns per unit of risk. The HEMOGENYX PHARMPLC LS 01 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  440.00  in HEMOGENYX PHARMPLC LS 01 on September 23, 2024 and sell it today you would lose (61.00) from holding HEMOGENYX PHARMPLC LS 01 or give up 13.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

CSL Limited  vs.  HEMOGENYX PHARMPLC LS 01

CSL Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CSL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

HEMOGENYX PHARMPLC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEMOGENYX PHARMPLC LS 01 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HEMOGENYX PHARMPLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and HEMOGENYX PHARMPLC

The main advantage of trading using opposite CSL and HEMOGENYX PHARMPLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, HEMOGENYX PHARMPLC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HEMOGENYX PHARMPLC will offset losses from the drop in HEMOGENYX PHARMPLC's long position.

The idea behind CSL Limited and HEMOGENYX PHARMPLC LS 01 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.