Correlation Between CSL and AstraZeneca PLC

Can any of the company-specific risk be diversified away by investing in both CSL and AstraZeneca 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 CSL and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSL and AstraZeneca PLC, you can compare the effects of market volatilities on CSL and AstraZeneca 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 CSL with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and AstraZeneca PLC.

Diversification Opportunities for CSL and AstraZeneca PLC

-0.12

Correlation Coefficient

CSL  AstraZeneca PLC

Good diversification

The 3 months correlation between CSL and AstraZeneca is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CSL and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC and CSL 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 CSL are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of CSL i.e., CSL and AstraZeneca PLC go up and down completely randomly.

Pair Corralation between CSL and AstraZeneca PLC

Assuming the 90 days horizon CSL is expected to under-perform the AstraZeneca PLC. In addition to that, CSL is 1.63 times more volatile than AstraZeneca PLC. It trades about -0.18 of its total potential returns per unit of risk. AstraZeneca PLC is currently generating about 0.09 per unit of volatility. If you would invest  16,046  in AstraZeneca PLC on August 16, 2025 and sell it today you would earn a total of  1,704  from holding AstraZeneca PLC or generate 10.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CSL  vs.  AstraZeneca PLC

CSL

Risk-Adjusted Performance

Weakest

Over the last 90 days CSL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AstraZeneca PLC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in AstraZeneca PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, AstraZeneca PLC may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with CSL and AstraZeneca PLC

The main advantage of trading using opposite CSL and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, AstraZeneca 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.

The idea behind CSL and AstraZeneca 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.