Correlation Between Andon Health and Healthcare
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By analyzing existing cross correlation between Andon Health Co and Healthcare Co, you can compare the effects of market volatilities on Andon Health and Healthcare 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 Andon Health with a short position of Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andon Health and Healthcare.
Diversification Opportunities for Andon Health and Healthcare
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Andon and Healthcare is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Andon Health Co and Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare and Andon Health 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 Andon Health Co are associated (or correlated) with Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare has no effect on the direction of Andon Health i.e., Andon Health and Healthcare go up and down completely randomly.
Pair Corralation between Andon Health and Healthcare
Assuming the 90 days trading horizon Andon Health Co is expected to under-perform the Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Andon Health Co is 1.14 times less risky than Healthcare. The stock trades about -0.07 of its potential returns per unit of risk. The Healthcare Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 734.00 in Healthcare Co on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Healthcare Co or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andon Health Co vs. Healthcare Co
Performance |
| Timeline |
| Andon Health |
| Healthcare |
Andon Health and Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andon Health and Healthcare
The main advantage of trading using opposite Andon Health and Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andon Health position performs unexpectedly, Healthcare 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 Healthcare will offset losses from the drop in Healthcare's long position.| Andon Health vs. Chengdu Kanghua Biological | Andon Health vs. Beijing Wantai Biological | Andon Health vs. Suzhou Novoprotein Scientific | Andon Health vs. Aluminum Corp of |
| Healthcare vs. PetroChina Co Ltd | Healthcare vs. China Mobile Limited | Healthcare vs. Industrial and Commercial | Healthcare vs. China Life Insurance |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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