Correlation Between G8 EDUCATION and SAFETY MEDICAL
Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION and SAFETY MEDICAL 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 G8 EDUCATION and SAFETY MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 EDUCATION and SAFETY MEDICAL PROD, you can compare the effects of market volatilities on G8 EDUCATION and SAFETY MEDICAL 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 G8 EDUCATION with a short position of SAFETY MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and SAFETY MEDICAL.
Diversification Opportunities for G8 EDUCATION and SAFETY MEDICAL
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between 3EAG and SAFETY is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and SAFETY MEDICAL PROD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFETY MEDICAL PROD and G8 EDUCATION 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 G8 EDUCATION are associated (or correlated) with SAFETY MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFETY MEDICAL PROD has no effect on the direction of G8 EDUCATION i.e., G8 EDUCATION and SAFETY MEDICAL go up and down completely randomly.
Pair Corralation between G8 EDUCATION and SAFETY MEDICAL
Assuming the 90 days trading horizon G8 EDUCATION is expected to generate 0.65 times more return on investment than SAFETY MEDICAL. However, G8 EDUCATION is 1.55 times less risky than SAFETY MEDICAL. It trades about 0.12 of its potential returns per unit of risk. SAFETY MEDICAL PROD is currently generating about -0.23 per unit of risk. If you would invest 79.00 in G8 EDUCATION on September 3, 2024 and sell it today you would earn a total of 3.00 from holding G8 EDUCATION or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G8 EDUCATION vs. SAFETY MEDICAL PROD
Performance |
| Timeline |
| G8 EDUCATION |
| SAFETY MEDICAL PROD |
G8 EDUCATION and SAFETY MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 EDUCATION and SAFETY MEDICAL
The main advantage of trading using opposite G8 EDUCATION and SAFETY MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION position performs unexpectedly, SAFETY MEDICAL 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 SAFETY MEDICAL will offset losses from the drop in SAFETY MEDICAL's long position.| G8 EDUCATION vs. Computershare Limited | G8 EDUCATION vs. INTERSHOP Communications Aktiengesellschaft | G8 EDUCATION vs. ATRESMEDIA | G8 EDUCATION vs. SCANSOURCE |
| SAFETY MEDICAL vs. CVS Health | SAFETY MEDICAL vs. FEMALE HEALTH | SAFETY MEDICAL vs. Taylor Morrison Home | SAFETY MEDICAL vs. Autohome ADR |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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