Correlation Between Pacific Hospital and Easywell Biomedicals
Can any of the company-specific risk be diversified away by investing in both Pacific Hospital and Easywell Biomedicals 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 Easywell Biomedicals 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 Easywell Biomedicals, you can compare the effects of market volatilities on Pacific Hospital and Easywell Biomedicals 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 Easywell Biomedicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Hospital and Easywell Biomedicals.
Diversification Opportunities for Pacific Hospital and Easywell Biomedicals
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacific and Easywell is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Hospital Supply and Easywell Biomedicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easywell Biomedicals 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 Easywell Biomedicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easywell Biomedicals has no effect on the direction of Pacific Hospital i.e., Pacific Hospital and Easywell Biomedicals go up and down completely randomly.
Pair Corralation between Pacific Hospital and Easywell Biomedicals
Assuming the 90 days trading horizon Pacific Hospital Supply is expected to generate 0.1 times more return on investment than Easywell Biomedicals. However, Pacific Hospital Supply is 9.91 times less risky than Easywell Biomedicals. It trades about 0.05 of its potential returns per unit of risk. Easywell Biomedicals is currently generating about -0.28 per unit of risk. If you would invest 8,880 in Pacific Hospital Supply on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Pacific Hospital Supply or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Hospital Supply vs. Easywell Biomedicals
Performance |
| Timeline |
| Pacific Hospital Supply |
| Easywell Biomedicals |
Pacific Hospital and Easywell Biomedicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Hospital and Easywell Biomedicals
The main advantage of trading using opposite Pacific Hospital and Easywell Biomedicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Hospital position performs unexpectedly, Easywell Biomedicals 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 Easywell Biomedicals will offset losses from the drop in Easywell Biomedicals' long position.| Pacific Hospital vs. Universal Vision Biotechnology | Pacific Hospital vs. Excelsior Medical Co | Pacific Hospital vs. Hi Clearance | Pacific Hospital vs. Brighten Optix |
| Easywell Biomedicals vs. Universal Vision Biotechnology | Easywell Biomedicals vs. Excelsior Medical Co | Easywell Biomedicals vs. Hi Clearance | Easywell Biomedicals vs. Brighten Optix |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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