Correlation Between Pacific Hospital and Cowealth Medical
Can any of the company-specific risk be diversified away by investing in both Pacific Hospital and Cowealth 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 Pacific Hospital and Cowealth Medical 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 Cowealth Medical Holding, you can compare the effects of market volatilities on Pacific Hospital and Cowealth 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 Pacific Hospital with a short position of Cowealth Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Hospital and Cowealth Medical.
Diversification Opportunities for Pacific Hospital and Cowealth Medical
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacific and Cowealth is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Hospital Supply and Cowealth Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowealth Medical Holding 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 Cowealth Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowealth Medical Holding has no effect on the direction of Pacific Hospital i.e., Pacific Hospital and Cowealth Medical go up and down completely randomly.
Pair Corralation between Pacific Hospital and Cowealth Medical
Assuming the 90 days trading horizon Pacific Hospital Supply is expected to generate 0.47 times more return on investment than Cowealth Medical. However, Pacific Hospital Supply is 2.12 times less risky than Cowealth Medical. It trades about 0.11 of its potential returns per unit of risk. Cowealth Medical Holding is currently generating about -0.04 per unit of risk. If you would invest 8,520 in Pacific Hospital Supply on October 26, 2024 and sell it today you would earn a total of 940.00 from holding Pacific Hospital Supply or generate 11.03% 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. Cowealth Medical Holding
Performance |
| Timeline |
| Pacific Hospital Supply |
| Cowealth Medical Holding |
Pacific Hospital and Cowealth Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Hospital and Cowealth Medical
The main advantage of trading using opposite Pacific Hospital and Cowealth Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Hospital position performs unexpectedly, Cowealth 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 Cowealth Medical will offset losses from the drop in Cowealth Medical's long position.| Pacific Hospital vs. StShine Optical Co | Pacific Hospital vs. Bioteque | Pacific Hospital vs. United Orthopedic | Pacific Hospital vs. TTY Biopharm Co |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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