Correlation Between Iffe Futura and Pharma Mar

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

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

Diversification Opportunities for Iffe Futura and Pharma Mar

0.36

Correlation Coefficient

Iffe Futura  Pharma Mar

Weak diversification

The 3 months correlation between Iffe and Pharma is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Iffe Futura SA and Pharma Mar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharma Mar SA and Iffe Futura 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 Iffe Futura SA are associated (or correlated) with Pharma Mar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharma Mar SA has no effect on the direction of Iffe Futura i.e., Iffe Futura and Pharma Mar go up and down completely randomly.

Pair Corralation between Iffe Futura and Pharma Mar

Assuming the 90 days trading horizon Iffe Futura SA is expected to generate 0.55 times more return on investment than Pharma Mar. However, Iffe Futura SA is 1.83 times less risky than Pharma Mar. It trades about 0.14 of its potential returns per unit of risk. Pharma Mar SA is currently generating about 0.0 per unit of risk. If you would invest  63.00  in Iffe Futura SA on April 24, 2025 and sell it today you would earn a total of  9.00  from holding Iffe Futura SA or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Iffe Futura SA  vs.  Pharma Mar SA

Iffe Futura SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iffe Futura SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Iffe Futura exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pharma Mar SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pharma Mar SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Pharma Mar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Iffe Futura and Pharma Mar

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

The idea behind Iffe Futura SA and Pharma Mar SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.