Correlation Between Standard Foods and Pacific Hospital
Can any of the company-specific risk be diversified away by investing in both Standard Foods and Pacific Hospital 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 Standard Foods and Pacific Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Foods Corp and Pacific Hospital Supply, you can compare the effects of market volatilities on Standard Foods and Pacific Hospital 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 Standard Foods with a short position of Pacific Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Foods and Pacific Hospital.
Diversification Opportunities for Standard Foods and Pacific Hospital
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Standard and Pacific is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Standard Foods Corp and Pacific Hospital Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Hospital Supply and Standard Foods 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 Standard Foods Corp are associated (or correlated) with Pacific Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Hospital Supply has no effect on the direction of Standard Foods i.e., Standard Foods and Pacific Hospital go up and down completely randomly.
Pair Corralation between Standard Foods and Pacific Hospital
Assuming the 90 days trading horizon Standard Foods Corp is expected to generate 0.85 times more return on investment than Pacific Hospital. However, Standard Foods Corp is 1.17 times less risky than Pacific Hospital. It trades about 0.26 of its potential returns per unit of risk. Pacific Hospital Supply is currently generating about -0.36 per unit of risk. If you would invest 3,475 in Standard Foods Corp on November 28, 2024 and sell it today you would earn a total of 75.00 from holding Standard Foods Corp or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Foods Corp vs. Pacific Hospital Supply
Performance |
| Timeline |
| Standard Foods Corp |
| Pacific Hospital Supply |
Standard Foods and Pacific Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Foods and Pacific Hospital
The main advantage of trading using opposite Standard Foods and Pacific Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Foods position performs unexpectedly, Pacific Hospital 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 Pacific Hospital will offset losses from the drop in Pacific Hospital's long position.| Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. TTET Union Corp | Standard Foods vs. President Chain Store | Standard Foods vs. Charoen Pokphand Enterprise |
| Pacific Hospital vs. StShine Optical Co | Pacific Hospital vs. Bioteque | Pacific Hospital vs. United Orthopedic | Pacific Hospital vs. TTY Biopharm Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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