Correlation Between ISoftStone Information and Healthcare
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By analyzing existing cross correlation between iSoftStone Information Technology and Healthcare Co, you can compare the effects of market volatilities on ISoftStone Information and 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 ISoftStone Information with a short position of Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISoftStone Information and Healthcare.
Diversification Opportunities for ISoftStone Information and Healthcare
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ISoftStone and Healthcare is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding iSoftStone Information Technol and Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare and ISoftStone Information 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 iSoftStone Information Technology are associated (or correlated) with Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare has no effect on the direction of ISoftStone Information i.e., ISoftStone Information and Healthcare go up and down completely randomly.
Pair Corralation between ISoftStone Information and Healthcare
Assuming the 90 days trading horizon iSoftStone Information Technology is expected to generate 2.13 times more return on investment than Healthcare. However, ISoftStone Information is 2.13 times more volatile than Healthcare Co. It trades about 0.05 of its potential returns per unit of risk. Healthcare Co is currently generating about -0.04 per unit of risk. If you would invest 2,744 in iSoftStone Information Technology on November 7, 2024 and sell it today you would earn a total of 2,624 from holding iSoftStone Information Technology or generate 95.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSoftStone Information Technol vs. Healthcare Co
Performance |
| Timeline |
| iSoftStone Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ISoftStone Information and Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISoftStone Information and Healthcare
The main advantage of trading using opposite ISoftStone Information and Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISoftStone Information position performs unexpectedly, 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 Healthcare will offset losses from the drop in Healthcare's long position.The idea behind iSoftStone Information Technology and Healthcare Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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