Correlation Between CHC Healthcare and Comtrend Corp
Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and Comtrend Corp 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 Comtrend Corp 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 Comtrend Corp, you can compare the effects of market volatilities on CHC Healthcare and Comtrend Corp 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 Comtrend Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and Comtrend Corp.
Diversification Opportunities for CHC Healthcare and Comtrend Corp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHC and Comtrend is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CHC Healthcare Group and Comtrend Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtrend 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 Comtrend Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtrend Corp has no effect on the direction of CHC Healthcare i.e., CHC Healthcare and Comtrend Corp go up and down completely randomly.
Pair Corralation between CHC Healthcare and Comtrend Corp
Assuming the 90 days trading horizon CHC Healthcare Group is expected to generate 0.94 times more return on investment than Comtrend Corp. However, CHC Healthcare Group is 1.07 times less risky than Comtrend Corp. It trades about 0.42 of its potential returns per unit of risk. Comtrend Corp is currently generating about -0.06 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 1,200 from holding CHC Healthcare Group or generate 27.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHC Healthcare Group vs. Comtrend Corp
Performance |
| Timeline |
| CHC Healthcare Group |
| Comtrend Corp |
CHC Healthcare and Comtrend Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHC Healthcare and Comtrend Corp
The main advantage of trading using opposite CHC Healthcare and Comtrend Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHC Healthcare position performs unexpectedly, Comtrend Corp 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 Comtrend Corp will offset losses from the drop in Comtrend Corp'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 |
| Comtrend Corp vs. Accton Technology Corp | Comtrend Corp vs. HTC Corp | Comtrend Corp vs. Wistron NeWeb Corp | Comtrend Corp vs. Arcadyan Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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