Correlation Between CHC Healthcare and Excelsior Medical
Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and Excelsior 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 CHC Healthcare and Excelsior Medical 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 Excelsior Medical Co, you can compare the effects of market volatilities on CHC Healthcare and Excelsior 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 CHC Healthcare with a short position of Excelsior Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and Excelsior Medical.
Diversification Opportunities for CHC Healthcare and Excelsior Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHC and Excelsior is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CHC Healthcare Group and Excelsior Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Medical 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 Excelsior Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Medical has no effect on the direction of CHC Healthcare i.e., CHC Healthcare and Excelsior Medical go up and down completely randomly.
Pair Corralation between CHC Healthcare and Excelsior Medical
Assuming the 90 days trading horizon CHC Healthcare is expected to generate 684.0 times less return on investment than Excelsior Medical. In addition to that, CHC Healthcare is 1.76 times more volatile than Excelsior Medical Co. It trades about 0.0 of its total potential returns per unit of risk. Excelsior Medical Co is currently generating about 0.06 per unit of volatility. If you would invest 6,480 in Excelsior Medical Co on August 29, 2024 and sell it today you would earn a total of 2,220 from holding Excelsior Medical Co or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHC Healthcare Group vs. Excelsior Medical Co
Performance |
| Timeline |
| CHC Healthcare Group |
| Excelsior Medical |
CHC Healthcare and Excelsior Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHC Healthcare and Excelsior Medical
The main advantage of trading using opposite CHC Healthcare and Excelsior Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHC Healthcare position performs unexpectedly, Excelsior 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 Excelsior Medical will offset losses from the drop in Excelsior Medical's long position.| CHC Healthcare vs. Phytohealth Corp | CHC Healthcare vs. GenMont Biotech | CHC Healthcare vs. Hung Sheng Construction | CHC Healthcare vs. De Licacy Industrial |
| Excelsior Medical vs. Wellell | Excelsior Medical vs. YungShin Global Holding | Excelsior Medical vs. Abnova Taiwan Corp | Excelsior Medical vs. Phytohealth Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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