Correlation Between Avita Medical and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both Avita Medical and Emergent Biosolutions 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 Avita Medical and Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and Emergent Biosolutions, you can compare the effects of market volatilities on Avita Medical and Emergent Biosolutions 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 Avita Medical with a short position of Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and Emergent Biosolutions.
Diversification Opportunities for Avita Medical and Emergent Biosolutions
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avita and Emergent is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions and Avita Medical 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 Avita Medical are associated (or correlated) with Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Avita Medical i.e., Avita Medical and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between Avita Medical and Emergent Biosolutions
Assuming the 90 days trading horizon Avita Medical is expected to generate 10.88 times less return on investment than Emergent Biosolutions. But when comparing it to its historical volatility, Avita Medical is 1.02 times less risky than Emergent Biosolutions. It trades about 0.01 of its potential returns per unit of risk. Emergent Biosolutions is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 693.00 in Emergent Biosolutions on July 18, 2025 and sell it today you would earn a total of 267.00 from holding Emergent Biosolutions or generate 38.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Avita Medical vs. Emergent Biosolutions
Performance |
| Timeline |
| Avita Medical |
| Emergent Biosolutions |
Avita Medical and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and Emergent Biosolutions
The main advantage of trading using opposite Avita Medical and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| Avita Medical vs. Commonwealth Bank of | Avita Medical vs. Australia and New | Avita Medical vs. Macquarie Group | Avita Medical vs. ANZ Group Holdings |
| Emergent Biosolutions vs. Elanco Animal Health | Emergent Biosolutions vs. SIGA Technologies | Emergent Biosolutions vs. Esperion Therapeutics | Emergent Biosolutions vs. Vir Biotechnology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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