Correlation Between Auto Trader and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Auto Trader and MEDICAL FACILITIES 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 Auto Trader and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Auto Trader and MEDICAL FACILITIES 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 Auto Trader with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and MEDICAL FACILITIES.
Diversification Opportunities for Auto Trader and MEDICAL FACILITIES
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auto and MEDICAL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and Auto Trader 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 Auto Trader Group are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Auto Trader i.e., Auto Trader and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Auto Trader and MEDICAL FACILITIES
Assuming the 90 days trading horizon Auto Trader Group is expected to under-perform the MEDICAL FACILITIES. But the stock apears to be less risky and, when comparing its historical volatility, Auto Trader Group is 1.17 times less risky than MEDICAL FACILITIES. The stock trades about -0.09 of its potential returns per unit of risk. The MEDICAL FACILITIES NEW is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 960.00 in MEDICAL FACILITIES NEW on August 29, 2024 and sell it today you would earn a total of 120.00 from holding MEDICAL FACILITIES NEW or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Auto Trader Group |
| MEDICAL FACILITIES NEW |
Auto Trader and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and MEDICAL FACILITIES
The main advantage of trading using opposite Auto Trader and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc |
| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. NMI Holdings | MEDICAL FACILITIES vs. Origin Agritech |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |