Correlation Between Diageo PLC and Viatris
Can any of the company-specific risk be diversified away by investing in both Diageo PLC and Viatris 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 Diageo PLC and Viatris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diageo PLC ADR and Viatris, you can compare the effects of market volatilities on Diageo PLC and Viatris 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 Diageo PLC with a short position of Viatris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diageo PLC and Viatris.
Diversification Opportunities for Diageo PLC and Viatris
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diageo and Viatris is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Diageo PLC ADR and Viatris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viatris and Diageo PLC 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 Diageo PLC ADR are associated (or correlated) with Viatris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viatris has no effect on the direction of Diageo PLC i.e., Diageo PLC and Viatris go up and down completely randomly.
Pair Corralation between Diageo PLC and Viatris
If you would invest (100.00) in Viatris on February 1, 2024 and sell it today you would earn a total of 100.00 from holding Viatris or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Diageo PLC ADR vs. Viatris
Performance |
Timeline |
Diageo PLC ADR |
Viatris |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Diageo PLC and Viatris Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Diageo PLC and Viatris
The main advantage of trading using opposite Diageo PLC and Viatris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diageo PLC position performs unexpectedly, Viatris 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 Viatris will offset losses from the drop in Viatris' long position.The idea behind Diageo PLC ADR and Viatris 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.Viatris vs. Shelf Drilling | Viatris vs. Patterson UTI Energy | Viatris vs. Delek Drilling | Viatris vs. Cabo Drilling Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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