Correlation Between Camellia Metal and Healthconn Corp
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and Healthconn Corp 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 Healthconn Corp 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 Healthconn Corp, you can compare the effects of market volatilities on Camellia Metal and Healthconn Corp 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 Healthconn Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and Healthconn Corp.
Diversification Opportunities for Camellia Metal and Healthconn Corp
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Camellia and Healthconn is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and Healthconn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthconn Corp 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 Healthconn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthconn Corp has no effect on the direction of Camellia Metal i.e., Camellia Metal and Healthconn Corp go up and down completely randomly.
Pair Corralation between Camellia Metal and Healthconn Corp
Assuming the 90 days trading horizon Camellia Metal Co is expected to generate 0.37 times more return on investment than Healthconn Corp. However, Camellia Metal Co is 2.67 times less risky than Healthconn Corp. It trades about 0.0 of its potential returns per unit of risk. Healthconn Corp is currently generating about -0.15 per unit of risk. If you would invest 1,490 in Camellia Metal Co on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Camellia Metal Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. Healthconn Corp
Performance |
| Timeline |
| Camellia Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Healthconn Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Camellia Metal and Healthconn Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and Healthconn Corp
The main advantage of trading using opposite Camellia Metal and Healthconn Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, Healthconn Corp 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 Healthconn Corp will offset losses from the drop in Healthconn Corp's long position.The idea behind Camellia Metal Co and Healthconn Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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