Correlation Between MEDICAL FACILITIES and CEOTRONICS
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and CEOTRONICS 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 MEDICAL FACILITIES and CEOTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and CEOTRONICS, you can compare the effects of market volatilities on MEDICAL FACILITIES and CEOTRONICS 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 MEDICAL FACILITIES with a short position of CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and CEOTRONICS.
Diversification Opportunities for MEDICAL FACILITIES and CEOTRONICS
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MEDICAL and CEOTRONICS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and CEOTRONICS go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and CEOTRONICS
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to generate 0.68 times more return on investment than CEOTRONICS. However, MEDICAL FACILITIES NEW is 1.48 times less risky than CEOTRONICS. It trades about -0.02 of its potential returns per unit of risk. CEOTRONICS is currently generating about -0.4 per unit of risk. If you would invest 1,050 in MEDICAL FACILITIES NEW on October 1, 2024 and sell it today you would lose (10.00) from holding MEDICAL FACILITIES NEW or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. CEOTRONICS
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| CEOTRONICS |
MEDICAL FACILITIES and CEOTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and CEOTRONICS
The main advantage of trading using opposite MEDICAL FACILITIES and CEOTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, CEOTRONICS 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 CEOTRONICS will offset losses from the drop in CEOTRONICS's long position.| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Medicover AB | MEDICAL FACILITIES vs. Charoen Pokphand Foods |
| CEOTRONICS vs. Reinsurance Group of | CEOTRONICS vs. Goosehead Insurance | CEOTRONICS vs. HANOVER INSURANCE | CEOTRONICS vs. SENECA FOODS A |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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