Correlation Between Sihuan Pharmaceutical and Collegium Pharmaceutical

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

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

Diversification Opportunities for Sihuan Pharmaceutical and Collegium Pharmaceutical

0.0

Correlation Coefficient

Sihuan Pharmaceutical  Collegium Pharmaceutical

Pay attention - limited upside

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

Pair Corralation between Sihuan Pharmaceutical and Collegium Pharmaceutical

If you would invest  2,712  in Collegium Pharmaceutical on February 14, 2025 and sell it today you would earn a total of  222.00  from holding Collegium Pharmaceutical or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sihuan Pharmaceutical Holdings  vs.  Collegium Pharmaceutical

Sihuan Pharmaceutical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sihuan Pharmaceutical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Sihuan Pharmaceutical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Collegium Pharmaceutical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Collegium Pharmaceutical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Collegium Pharmaceutical is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sihuan Pharmaceutical and Collegium Pharmaceutical

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

The idea behind Sihuan Pharmaceutical Holdings and Collegium Pharmaceutical 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.