Correlation Between STADA Arzneimittel and Teva Pharma
Can any of the company-specific risk be diversified away by investing in both STADA Arzneimittel and Teva Pharma 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 STADA Arzneimittel and Teva Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STADA Arzneimittel Aktiengesellschaft and Teva Pharma Industries, you can compare the effects of market volatilities on STADA Arzneimittel and Teva Pharma 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 STADA Arzneimittel with a short position of Teva Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of STADA Arzneimittel and Teva Pharma.
Diversification Opportunities for STADA Arzneimittel and Teva Pharma
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STADA and Teva is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STADA Arzneimittel Aktiengesel and Teva Pharma Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teva Pharma Industries and STADA Arzneimittel 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 STADA Arzneimittel Aktiengesellschaft are associated (or correlated) with Teva Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teva Pharma Industries has no effect on the direction of STADA Arzneimittel i.e., STADA Arzneimittel and Teva Pharma go up and down completely randomly.
Pair Corralation between STADA Arzneimittel and Teva Pharma
If you would invest (100.00) in STADA Arzneimittel Aktiengesellschaft on January 24, 2024 and sell it today you would earn a total of 100.00 from holding STADA Arzneimittel Aktiengesellschaft 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 |
STADA Arzneimittel Aktiengesel vs. Teva Pharma Industries
Performance |
Timeline |
STADA Arzneimittel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Teva Pharma Industries |
STADA Arzneimittel and Teva Pharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with STADA Arzneimittel and Teva Pharma
The main advantage of trading using opposite STADA Arzneimittel and Teva Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STADA Arzneimittel position performs unexpectedly, Teva Pharma 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 Teva Pharma will offset losses from the drop in Teva Pharma's long position.STADA Arzneimittel vs. Playtika Holding Corp | STADA Arzneimittel vs. JD Sports Fashion | STADA Arzneimittel vs. Diageo PLC ADR | STADA Arzneimittel vs. Molson Coors Brewing |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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