Correlation Between Alnylam Pharmaceuticals and Alexion Pharmaceuticals

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

Diversification Opportunities for Alnylam Pharmaceuticals and Alexion Pharmaceuticals

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Alnylam Pharmaceuticals and Alexion Pharmaceuticals

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

Alnylam Pharmaceuticals  vs.  Alexion Pharmaceuticals

 Performance 
       Timeline  
Alnylam Pharmaceuticals 

Risk-Adjusted Performance

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Over the last 90 days Alnylam Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Alexion Pharmaceuticals 

Risk-Adjusted Performance

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

Alnylam Pharmaceuticals and Alexion Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alnylam Pharmaceuticals and Alexion Pharmaceuticals

The main advantage of trading using opposite Alnylam Pharmaceuticals and Alexion Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alnylam Pharmaceuticals position performs unexpectedly, Alexion 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 Alexion Pharmaceuticals will offset losses from the drop in Alexion Pharmaceuticals' long position.
The idea behind Alnylam Pharmaceuticals and Alexion 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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