Correlation Between CHC Healthcare and Trade Van
Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and Trade Van 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 Trade Van 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 Trade Van Information Services, you can compare the effects of market volatilities on CHC Healthcare and Trade Van 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 Trade Van. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and Trade Van.
Diversification Opportunities for CHC Healthcare and Trade Van
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHC and Trade is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CHC Healthcare Group and Trade Van Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Van Information 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 Trade Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Van Information has no effect on the direction of CHC Healthcare i.e., CHC Healthcare and Trade Van go up and down completely randomly.
Pair Corralation between CHC Healthcare and Trade Van
Assuming the 90 days trading horizon CHC Healthcare Group is expected to under-perform the Trade Van. In addition to that, CHC Healthcare is 2.1 times more volatile than Trade Van Information Services. It trades about -0.06 of its total potential returns per unit of risk. Trade Van Information Services is currently generating about 0.13 per unit of volatility. If you would invest 7,460 in Trade Van Information Services on September 2, 2024 and sell it today you would earn a total of 630.00 from holding Trade Van Information Services or generate 8.45% 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. Trade Van Information Services
Performance |
| Timeline |
| CHC Healthcare Group |
| Trade Van Information |
CHC Healthcare and Trade Van Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHC Healthcare and Trade Van
The main advantage of trading using opposite CHC Healthcare and Trade Van positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHC Healthcare position performs unexpectedly, Trade Van 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 Trade Van will offset losses from the drop in Trade Van'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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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