Correlation Between CSL and FORTRESS BIOTECHPRFA

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

By analyzing existing cross correlation between CSL LTD SPONADR and FORTRESS BIOTECHPRFA 25, you can compare the effects of market volatilities on CSL and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and FORTRESS BIOTECHPRFA.

Diversification Opportunities for CSL and FORTRESS BIOTECHPRFA

-0.52

Correlation Coefficient

CSL  FORTRESS BIOTECHPRFA

Excellent diversification

The 3 months correlation between CSL and FORTRESS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CSL LTD SPONADR and FORTRESS BIOTECHPRFA 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTRESS BIOTECHPRFA 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 LTD SPONADR are associated (or correlated) with FORTRESS BIOTECHPRFA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTRESS BIOTECHPRFA has no effect on the direction of CSL i.e., CSL and FORTRESS BIOTECHPRFA go up and down completely randomly.

Pair Corralation between CSL and FORTRESS BIOTECHPRFA

Assuming the 90 days trading horizon CSL is expected to generate 1.84 times less return on investment than FORTRESS BIOTECHPRFA. But when comparing it to its historical volatility, CSL LTD SPONADR is 3.55 times less risky than FORTRESS BIOTECHPRFA. It trades about 0.1 of its potential returns per unit of risk. FORTRESS BIOTECHPRFA 25 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  575.00  in FORTRESS BIOTECHPRFA 25 on May 19, 2025 and sell it today you would earn a total of  55.00  from holding FORTRESS BIOTECHPRFA 25 or generate 9.57% return on investment over 90 days.

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

CSL LTD SPONADR  vs.  FORTRESS BIOTECHPRFA 25

CSL LTD SPONADR

Risk-Adjusted Performance

Fair

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

FORTRESS BIOTECHPRFA

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in FORTRESS BIOTECHPRFA 25 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, FORTRESS BIOTECHPRFA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and FORTRESS BIOTECHPRFA

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

The idea behind CSL LTD SPONADR and FORTRESS BIOTECHPRFA 25 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.