Correlation Between SciClone Pharmaceuticals and Amarin PLC
Can any of the company-specific risk be diversified away by investing in both SciClone Pharmaceuticals and Amarin PLC 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 SciClone Pharmaceuticals and Amarin PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SciClone Pharmaceuticals and Amarin PLC, you can compare the effects of market volatilities on SciClone Pharmaceuticals and Amarin PLC 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 SciClone Pharmaceuticals with a short position of Amarin PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SciClone Pharmaceuticals and Amarin PLC.
Diversification Opportunities for SciClone Pharmaceuticals and Amarin PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SciClone and Amarin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SciClone Pharmaceuticals and Amarin PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarin PLC and SciClone Pharmaceuticals 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 SciClone Pharmaceuticals are associated (or correlated) with Amarin PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarin PLC has no effect on the direction of SciClone Pharmaceuticals i.e., SciClone Pharmaceuticals and Amarin PLC go up and down completely randomly.
Pair Corralation between SciClone Pharmaceuticals and Amarin PLC
If you would invest 74.00 in Amarin PLC on January 20, 2024 and sell it today you would earn a total of 13.00 from holding Amarin PLC or generate 17.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SciClone Pharmaceuticals vs. Amarin PLC
Performance |
| Timeline |
| SciClone Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Amarin PLC |
SciClone Pharmaceuticals and Amarin PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SciClone Pharmaceuticals and Amarin PLC
The main advantage of trading using opposite SciClone Pharmaceuticals and Amarin PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SciClone Pharmaceuticals position performs unexpectedly, Amarin PLC 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 Amarin PLC will offset losses from the drop in Amarin PLC's long position.The idea behind SciClone Pharmaceuticals and Amarin PLC 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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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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