Correlation Between CHC Healthcare and Standard Foods
Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and Standard Foods 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 CHC Healthcare and Standard Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHC Healthcare Group and Standard Foods Corp, you can compare the effects of market volatilities on CHC Healthcare and Standard Foods 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 CHC Healthcare with a short position of Standard Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and Standard Foods.
Diversification Opportunities for CHC Healthcare and Standard Foods
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHC and Standard is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CHC Healthcare Group and Standard Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Foods Corp and CHC Healthcare 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 CHC Healthcare Group are associated (or correlated) with Standard Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Foods Corp has no effect on the direction of CHC Healthcare i.e., CHC Healthcare and Standard Foods go up and down completely randomly.
Pair Corralation between CHC Healthcare and Standard Foods
Assuming the 90 days trading horizon CHC Healthcare Group is expected to generate 6.14 times more return on investment than Standard Foods. However, CHC Healthcare is 6.14 times more volatile than Standard Foods Corp. It trades about 0.58 of its potential returns per unit of risk. Standard Foods Corp is currently generating about 0.26 per unit of risk. If you would invest 4,430 in CHC Healthcare Group on November 28, 2024 and sell it today you would earn a total of 1,490 from holding CHC Healthcare Group or generate 33.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHC Healthcare Group vs. Standard Foods Corp
Performance |
| Timeline |
| CHC Healthcare Group |
| Standard Foods Corp |
CHC Healthcare and Standard Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHC Healthcare and Standard Foods
The main advantage of trading using opposite CHC Healthcare and Standard Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHC Healthcare position performs unexpectedly, Standard Foods 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 Standard Foods will offset losses from the drop in Standard Foods' long position.| CHC Healthcare vs. Phytohealth Corp | CHC Healthcare vs. GenMont Biotech | CHC Healthcare vs. Hung Sheng Construction | CHC Healthcare vs. De Licacy Industrial |
| Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. TTET Union Corp | Standard Foods vs. President Chain Store | Standard Foods vs. Charoen Pokphand Enterprise |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |