Correlation Between Coxon Precise and SS Healthcare
Can any of the company-specific risk be diversified away by investing in both Coxon Precise and SS 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 Coxon Precise and SS Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coxon Precise Industrial and SS Healthcare Holding, you can compare the effects of market volatilities on Coxon Precise and SS 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 Coxon Precise with a short position of SS Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coxon Precise and SS Healthcare.
Diversification Opportunities for Coxon Precise and SS Healthcare
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Coxon and 4198 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Coxon Precise Industrial and SS Healthcare Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS Healthcare Holding and Coxon Precise 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 Coxon Precise Industrial are associated (or correlated) with SS Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS Healthcare Holding has no effect on the direction of Coxon Precise i.e., Coxon Precise and SS Healthcare go up and down completely randomly.
Pair Corralation between Coxon Precise and SS Healthcare
Assuming the 90 days trading horizon Coxon Precise is expected to generate 1.74 times less return on investment than SS Healthcare. But when comparing it to its historical volatility, Coxon Precise Industrial is 1.33 times less risky than SS Healthcare. It trades about 0.03 of its potential returns per unit of risk. SS Healthcare Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,400 in SS Healthcare Holding on September 2, 2024 and sell it today you would earn a total of 810.00 from holding SS Healthcare Holding or generate 33.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coxon Precise Industrial vs. SS Healthcare Holding
Performance |
| Timeline |
| Coxon Precise Industrial |
| SS Healthcare Holding |
Coxon Precise and SS Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coxon Precise and SS Healthcare
The main advantage of trading using opposite Coxon Precise and SS Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coxon Precise position performs unexpectedly, SS 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 SS Healthcare will offset losses from the drop in SS Healthcare's long position.The idea behind Coxon Precise Industrial and SS Healthcare Holding 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.| SS Healthcare vs. Universal Microelectronics Co | SS Healthcare vs. Hunya Foods Co | SS Healthcare vs. Ma Kuang Healthcare | SS Healthcare vs. Shinkong Insurance Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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