Correlation Between Universal Health and Team Internet
Can any of the company-specific risk be diversified away by investing in both Universal Health and Team Internet 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 Universal Health and Team Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services and Team Internet Group, you can compare the effects of market volatilities on Universal Health and Team Internet 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 Universal Health with a short position of Team Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Team Internet.
Diversification Opportunities for Universal Health and Team Internet
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and Team is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services and Team Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Internet Group and Universal 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 Universal Health Services are associated (or correlated) with Team Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Internet Group has no effect on the direction of Universal Health i.e., Universal Health and Team Internet go up and down completely randomly.
Pair Corralation between Universal Health and Team Internet
Assuming the 90 days trading horizon Universal Health Services is expected to generate 0.68 times more return on investment than Team Internet. However, Universal Health Services is 1.48 times less risky than Team Internet. It trades about 0.04 of its potential returns per unit of risk. Team Internet Group is currently generating about -0.01 per unit of risk. If you would invest 14,835 in Universal Health Services on October 13, 2024 and sell it today you would earn a total of 3,644 from holding Universal Health Services or generate 24.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.77% |
| Values | Daily Returns |
Universal Health Services vs. Team Internet Group
Performance |
| Timeline |
| Universal Health Services |
| Team Internet Group |
Universal Health and Team Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Team Internet
The main advantage of trading using opposite Universal Health and Team Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Team Internet 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 Team Internet will offset losses from the drop in Team Internet's long position.| Universal Health vs. Universal Display Corp | Universal Health vs. Thor Mining PLC | Universal Health vs. Wheaton Precious Metals | Universal Health vs. JLEN Environmental Assets |
| Team Internet vs. Ameriprise Financial | Team Internet vs. Futura Medical | Team Internet vs. Nordea Bank Abp | Team Internet vs. Tetragon Financial 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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