Correlation Between Pacific Hospital and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Pacific Hospital and StShine Optical 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 Pacific Hospital and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Hospital Supply and StShine Optical Co, you can compare the effects of market volatilities on Pacific Hospital and StShine Optical 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 Pacific Hospital with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Hospital and StShine Optical.
Diversification Opportunities for Pacific Hospital and StShine Optical
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pacific and StShine is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Hospital Supply and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Pacific Hospital 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 Pacific Hospital Supply are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Pacific Hospital i.e., Pacific Hospital and StShine Optical go up and down completely randomly.
Pair Corralation between Pacific Hospital and StShine Optical
Assuming the 90 days trading horizon Pacific Hospital is expected to generate 39.72 times less return on investment than StShine Optical. But when comparing it to its historical volatility, Pacific Hospital Supply is 4.28 times less risky than StShine Optical. It trades about 0.02 of its potential returns per unit of risk. StShine Optical Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 21,150 in StShine Optical Co on August 29, 2024 and sell it today you would earn a total of 2,100 from holding StShine Optical Co or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Hospital Supply vs. StShine Optical Co
Performance |
| Timeline |
| Pacific Hospital Supply |
| StShine Optical |
Pacific Hospital and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Hospital and StShine Optical
The main advantage of trading using opposite Pacific Hospital and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Hospital position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| Pacific Hospital vs. Universal Vision Biotechnology | Pacific Hospital vs. Excelsior Medical Co | Pacific Hospital vs. Delta Asia International | Pacific Hospital vs. Hi Clearance |
| StShine Optical vs. Sinphar Pharmaceutical Co | StShine Optical vs. Grape King Bio | StShine Optical vs. Apex Biotechnology Corp | StShine Optical vs. Leatec Fine Ceramics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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