Correlation Between Indutrade and Induction Healthcare
Can any of the company-specific risk be diversified away by investing in both Indutrade and Induction Healthcare 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 Indutrade and Induction Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Induction Healthcare Group, you can compare the effects of market volatilities on Indutrade and Induction 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 Indutrade with a short position of Induction Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Induction Healthcare.
Diversification Opportunities for Indutrade and Induction Healthcare
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indutrade and Induction is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Induction Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Induction Healthcare and Indutrade 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 Indutrade AB are associated (or correlated) with Induction Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Induction Healthcare has no effect on the direction of Indutrade i.e., Indutrade and Induction Healthcare go up and down completely randomly.
Pair Corralation between Indutrade and Induction Healthcare
Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.44 times more return on investment than Induction Healthcare. However, Indutrade AB is 2.28 times less risky than Induction Healthcare. It trades about 0.03 of its potential returns per unit of risk. Induction Healthcare Group is currently generating about -0.08 per unit of risk. If you would invest 26,197 in Indutrade AB on September 12, 2024 and sell it today you would earn a total of 2,453 from holding Indutrade AB or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Indutrade AB vs. Induction Healthcare Group
Performance |
| Timeline |
| Indutrade AB |
| Induction Healthcare |
Indutrade and Induction Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Induction Healthcare
The main advantage of trading using opposite Indutrade and Induction Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Induction 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 Induction Healthcare will offset losses from the drop in Induction Healthcare's long position.| Indutrade vs. Playtech Plc | Indutrade vs. Zoom Video Communications | Indutrade vs. Infrastrutture Wireless Italiane | Indutrade vs. PureTech Health plc |
| Induction Healthcare vs. Roebuck Food Group | Induction Healthcare vs. Axfood AB | Induction Healthcare vs. Virgin Wines UK | Induction Healthcare vs. Intuitive Investments Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |