Correlation Between Pacific Hospital and CHO Pharma
Can any of the company-specific risk be diversified away by investing in both Pacific Hospital and CHO Pharma 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 CHO Pharma 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 CHO Pharma, you can compare the effects of market volatilities on Pacific Hospital and CHO Pharma 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 CHO Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Hospital and CHO Pharma.
Diversification Opportunities for Pacific Hospital and CHO Pharma
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and CHO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Hospital Supply and CHO Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHO Pharma 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 CHO Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHO Pharma has no effect on the direction of Pacific Hospital i.e., Pacific Hospital and CHO Pharma go up and down completely randomly.
Pair Corralation between Pacific Hospital and CHO Pharma
Assuming the 90 days trading horizon Pacific Hospital Supply is expected to generate 0.73 times more return on investment than CHO Pharma. However, Pacific Hospital Supply is 1.36 times less risky than CHO Pharma. It trades about 0.0 of its potential returns per unit of risk. CHO Pharma is currently generating about -0.11 per unit of risk. If you would invest 9,480 in Pacific Hospital Supply on October 25, 2024 and sell it today you would lose (20.00) from holding Pacific Hospital Supply or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pacific Hospital Supply vs. CHO Pharma
Performance |
| Timeline |
| Pacific Hospital Supply |
| CHO Pharma |
Pacific Hospital and CHO Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Hospital and CHO Pharma
The main advantage of trading using opposite Pacific Hospital and CHO Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Hospital position performs unexpectedly, CHO Pharma 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 CHO Pharma will offset losses from the drop in CHO Pharma'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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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