Correlation Between Mallinckrodt Plc and Takeda Pharmaceutical

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

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

Diversification Opportunities for Mallinckrodt Plc and Takeda Pharmaceutical

0.0

Correlation Coefficient

Mallinckrodt Plc  Takeda Pharmaceutical

Pay attention - limited upside

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

Pair Corralation between Mallinckrodt Plc and Takeda Pharmaceutical

If you would invest (100.00) in Mallinckrodt Plc on May 7, 2025 and sell it today you would earn a total of  100.00  from holding Mallinckrodt Plc or generate -100.0% return on investment over 90 days.

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

Mallinckrodt Plc  vs.  Takeda Pharmaceutical Co

Mallinckrodt Plc

Risk-Adjusted Performance

Weakest

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

Takeda Pharmaceutical

Risk-Adjusted Performance

Weakest

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

Pair Trading with Mallinckrodt Plc and Takeda Pharmaceutical

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

The idea behind Mallinckrodt Plc and Takeda Pharmaceutical Co 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.