Correlation Between Pacific Hospital and Universal Vision
Can any of the company-specific risk be diversified away by investing in both Pacific Hospital and Universal Vision 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 Universal Vision 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 Universal Vision Biotechnology, you can compare the effects of market volatilities on Pacific Hospital and Universal Vision 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 Universal Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Hospital and Universal Vision.
Diversification Opportunities for Pacific Hospital and Universal Vision
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacific and Universal is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Hospital Supply and Universal Vision Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Vision Bio 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 Universal Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Vision Bio has no effect on the direction of Pacific Hospital i.e., Pacific Hospital and Universal Vision go up and down completely randomly.
Pair Corralation between Pacific Hospital and Universal Vision
Assuming the 90 days trading horizon Pacific Hospital Supply is expected to under-perform the Universal Vision. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Hospital Supply is 1.99 times less risky than Universal Vision. The stock trades about -0.29 of its potential returns per unit of risk. The Universal Vision Biotechnology is currently generating about 0.71 of returns per unit of risk over similar time horizon. If you would invest 20,550 in Universal Vision Biotechnology on November 27, 2024 and sell it today you would earn a total of 2,750 from holding Universal Vision Biotechnology or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Hospital Supply vs. Universal Vision Biotechnology
Performance |
| Timeline |
| Pacific Hospital Supply |
| Universal Vision Bio |
Pacific Hospital and Universal Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Hospital and Universal Vision
The main advantage of trading using opposite Pacific Hospital and Universal Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Hospital position performs unexpectedly, Universal Vision 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 Universal Vision will offset losses from the drop in Universal Vision'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 |
| Universal Vision vs. MedFirst Healthcare Services | Universal Vision vs. Pontex Polyblend CoLtd | Universal Vision vs. Mercuries Life Insurance | Universal Vision vs. Hua Nan Financial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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