Correlation Between Perrigo Company and SciClone Pharmaceuticals

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Can any of the company-specific risk be diversified away by investing in both Perrigo Company and SciClone 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 Perrigo Company and SciClone Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perrigo Company PLC and SciClone Pharmaceuticals, you can compare the effects of market volatilities on Perrigo Company and SciClone 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 Perrigo Company with a short position of SciClone Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perrigo Company and SciClone Pharmaceuticals.

Diversification Opportunities for Perrigo Company and SciClone Pharmaceuticals

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Perrigo and SciClone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Perrigo Company PLC and SciClone Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SciClone Pharmaceuticals and Perrigo Company 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 Perrigo Company PLC are associated (or correlated) with SciClone Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SciClone Pharmaceuticals has no effect on the direction of Perrigo Company i.e., Perrigo Company and SciClone Pharmaceuticals go up and down completely randomly.

Pair Corralation between Perrigo Company and SciClone Pharmaceuticals

If you would invest (100.00) in SciClone Pharmaceuticals on December 29, 2023 and sell it today you would earn a total of  100.00  from holding SciClone Pharmaceuticals or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Perrigo Company PLC  vs.  SciClone Pharmaceuticals

 Performance 
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Perrigo Company 

Risk-Adjusted Performance

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Over the last 90 days Perrigo Company PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Perrigo Company is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
SciClone Pharmaceuticals 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days SciClone Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, SciClone Pharmaceuticals is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Perrigo Company and SciClone Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Perrigo Company and SciClone Pharmaceuticals

The main advantage of trading using opposite Perrigo Company and SciClone Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perrigo Company position performs unexpectedly, SciClone 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 SciClone Pharmaceuticals will offset losses from the drop in SciClone Pharmaceuticals' long position.
The idea behind Perrigo Company PLC and SciClone 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.
Check out your portfolio center.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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