Correlation Between Camellia Metal and MedFirst Healthcare
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and MedFirst 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 Camellia Metal and MedFirst Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Metal Co and MedFirst Healthcare Services, you can compare the effects of market volatilities on Camellia Metal and MedFirst 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 Camellia Metal with a short position of MedFirst Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and MedFirst Healthcare.
Diversification Opportunities for Camellia Metal and MedFirst Healthcare
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Camellia and MedFirst is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and MedFirst Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedFirst Healthcare and Camellia Metal 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 Camellia Metal Co are associated (or correlated) with MedFirst Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedFirst Healthcare has no effect on the direction of Camellia Metal i.e., Camellia Metal and MedFirst Healthcare go up and down completely randomly.
Pair Corralation between Camellia Metal and MedFirst Healthcare
Assuming the 90 days trading horizon Camellia Metal Co is expected to under-perform the MedFirst Healthcare. In addition to that, Camellia Metal is 3.99 times more volatile than MedFirst Healthcare Services. It trades about -0.15 of its total potential returns per unit of risk. MedFirst Healthcare Services is currently generating about -0.1 per unit of volatility. If you would invest 6,980 in MedFirst Healthcare Services on September 2, 2024 and sell it today you would lose (90.00) from holding MedFirst Healthcare Services or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. MedFirst Healthcare Services
Performance |
| Timeline |
| Camellia Metal |
| MedFirst Healthcare |
Camellia Metal and MedFirst Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and MedFirst Healthcare
The main advantage of trading using opposite Camellia Metal and MedFirst Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, MedFirst 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 MedFirst Healthcare will offset losses from the drop in MedFirst Healthcare's long position.| Camellia Metal vs. Yang Ming Marine | Camellia Metal vs. Wan Hai Lines | Camellia Metal vs. Hsin Kuang Steel | Camellia Metal vs. Evergreen Marine Corp |
| MedFirst Healthcare vs. LandMark Optoelectronics | MedFirst Healthcare vs. Compal Electronics | MedFirst Healthcare vs. Excellence Optoelectronic | MedFirst Healthcare vs. Leader Electronics |
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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