Correlation Between Partners Group and Galenica Sante

Can any of the company-specific risk be diversified away by investing in both Partners Group and Galenica Sante 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 Partners Group and Galenica Sante into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Partners Group Holding and Galenica Sante AG, you can compare the effects of market volatilities on Partners Group and Galenica Sante 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 Partners Group with a short position of Galenica Sante. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Group and Galenica Sante.

Diversification Opportunities for Partners Group and Galenica Sante

0.27

Correlation Coefficient

Partners Group  Galenica Sante

Modest diversification

The 3 months correlation between Partners and Galenica is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Partners Group Holding and Galenica Sante AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galenica Sante AG and Partners Group 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 Partners Group Holding are associated (or correlated) with Galenica Sante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galenica Sante AG has no effect on the direction of Partners Group i.e., Partners Group and Galenica Sante go up and down completely randomly.

Pair Corralation between Partners Group and Galenica Sante

Assuming the 90 days trading horizon Partners Group Holding is expected to generate 1.44 times more return on investment than Galenica Sante. However, Partners Group is 1.44 times more volatile than Galenica Sante AG. It trades about 0.11 of its potential returns per unit of risk. Galenica Sante AG is currently generating about 0.03 per unit of risk. If you would invest  119,400  in Partners Group Holding on September 13, 2024 and sell it today you would earn a total of  10,300  from holding Partners Group Holding or generate 8.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Partners Group Holding  vs.  Galenica Sante AG

Partners Group Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Partners Group Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Partners Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Galenica Sante AG

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Galenica Sante AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Galenica Sante is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Partners Group and Galenica Sante

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

The idea behind Partners Group Holding and Galenica Sante AG 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.