Correlation Between Halozyme Therapeutics and Apellis Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Halozyme Therapeutics and Apellis Pharmaceuticals 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 Halozyme Therapeutics and Apellis Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Halozyme Therapeutics and Apellis Pharmaceuticals, you can compare the effects of market volatilities on Halozyme Therapeutics and Apellis Pharmaceuticals 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 Halozyme Therapeutics with a short position of Apellis Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halozyme Therapeutics and Apellis Pharmaceuticals.

Diversification Opportunities for Halozyme Therapeutics and Apellis Pharmaceuticals

-0.1

Correlation Coefficient

Halozyme Therapeutics  Apellis Pharmaceuticals

Good diversification

The 3 months correlation between Halozyme and Apellis is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Halozyme Therapeutics and Apellis Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apellis Pharmaceuticals and Halozyme Therapeutics 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 Halozyme Therapeutics are associated (or correlated) with Apellis Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apellis Pharmaceuticals has no effect on the direction of Halozyme Therapeutics i.e., Halozyme Therapeutics and Apellis Pharmaceuticals go up and down completely randomly.

Pair Corralation between Halozyme Therapeutics and Apellis Pharmaceuticals

Given the investment horizon of 90 days Halozyme Therapeutics is expected to generate 7.96 times less return on investment than Apellis Pharmaceuticals. But when comparing it to its historical volatility, Halozyme Therapeutics is 1.71 times less risky than Apellis Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Apellis Pharmaceuticals is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,171  in Apellis Pharmaceuticals on September 20, 2024 and sell it today you would lose (1,769) from holding Apellis Pharmaceuticals or give up 34.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Halozyme Therapeutics  vs.  Apellis Pharmaceuticals

Halozyme Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halozyme Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Apellis Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apellis Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Apellis Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Halozyme Therapeutics and Apellis Pharmaceuticals

The main advantage of trading using opposite Halozyme Therapeutics and Apellis Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halozyme Therapeutics position performs unexpectedly, Apellis Pharmaceuticals 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 Apellis Pharmaceuticals will offset losses from the drop in Apellis Pharmaceuticals' long position.

The idea behind Halozyme Therapeutics and Apellis Pharmaceuticals 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .