Correlation Between CSL and Astellas Pharma

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

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

Diversification Opportunities for CSL and Astellas Pharma

0.14

Correlation Coefficient

CSL  Astellas Pharma

Average diversification

The 3 months correlation between CSL and Astellas is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma 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 Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of CSL i.e., CSL and Astellas Pharma go up and down completely randomly.

Pair Corralation between CSL and Astellas Pharma

Assuming the 90 days horizon CSL is expected to under-perform the Astellas Pharma. In addition to that, CSL is 1.83 times more volatile than Astellas Pharma. It trades about -0.06 of its total potential returns per unit of risk. Astellas Pharma is currently generating about 0.19 per unit of volatility. If you would invest  973.00  in Astellas Pharma on May 27, 2025 and sell it today you would earn a total of  176.00  from holding Astellas Pharma or generate 18.09% return on investment over 90 days.

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

CSL  vs.  Astellas Pharma

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 latest fragile performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Astellas Pharma

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Astellas Pharma are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Astellas Pharma showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and Astellas Pharma

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

The idea behind CSL and Astellas Pharma 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.