Correlation Between SUN ART and HEMOGENYX PHARMPLC

Can any of the company-specific risk be diversified away by investing in both SUN ART 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 SUN ART and HEMOGENYX PHARMPLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SUN ART RETAIL and HEMOGENYX PHARMPLC LS 01, you can compare the effects of market volatilities on SUN ART 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 SUN ART with a short position of HEMOGENYX PHARMPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and HEMOGENYX PHARMPLC.

Diversification Opportunities for SUN ART and HEMOGENYX PHARMPLC

-0.39

Correlation Coefficient

SUN ART  HEMOGENYX PHARMPLC

Very good diversification

The 3 months correlation between SUN and HEMOGENYX is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL 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 SUN ART 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 SUN ART RETAIL 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 SUN ART i.e., SUN ART and HEMOGENYX PHARMPLC go up and down completely randomly.

Pair Corralation between SUN ART and HEMOGENYX PHARMPLC

Assuming the 90 days trading horizon SUN ART is expected to generate 14.13 times less return on investment than HEMOGENYX PHARMPLC. But when comparing it to its historical volatility, SUN ART RETAIL is 28.28 times less risky than HEMOGENYX PHARMPLC. It trades about 0.25 of its potential returns per unit of risk. HEMOGENYX PHARMPLC LS 01 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  460.00  in HEMOGENYX PHARMPLC LS 01 on September 20, 2024 and sell it today you would lose (46.00) from holding HEMOGENYX PHARMPLC LS 01 or give up 10.0% of portfolio value over 90 days.

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

SUN ART RETAIL  vs.  HEMOGENYX PHARMPLC LS 01

SUN ART RETAIL

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SUN ART RETAIL are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, SUN ART exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 unsteady basic indicators, HEMOGENYX PHARMPLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SUN ART and HEMOGENYX PHARMPLC

The main advantage of trading using opposite SUN ART and HEMOGENYX PHARMPLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN ART 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 SUN ART RETAIL 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.