Correlation Between MedFirst Healthcare and HOYA Resort
Can any of the company-specific risk be diversified away by investing in both MedFirst Healthcare and HOYA Resort 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 MedFirst Healthcare and HOYA Resort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MedFirst Healthcare Services and HOYA Resort Hotel, you can compare the effects of market volatilities on MedFirst Healthcare and HOYA Resort 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 MedFirst Healthcare with a short position of HOYA Resort. Check out your portfolio center. Please also check ongoing floating volatility patterns of MedFirst Healthcare and HOYA Resort.
Diversification Opportunities for MedFirst Healthcare and HOYA Resort
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MedFirst and HOYA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding MedFirst Healthcare Services and HOYA Resort Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA Resort Hotel and MedFirst 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 MedFirst Healthcare Services are associated (or correlated) with HOYA Resort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA Resort Hotel has no effect on the direction of MedFirst Healthcare i.e., MedFirst Healthcare and HOYA Resort go up and down completely randomly.
Pair Corralation between MedFirst Healthcare and HOYA Resort
Assuming the 90 days trading horizon MedFirst Healthcare Services is expected to under-perform the HOYA Resort. But the stock apears to be less risky and, when comparing its historical volatility, MedFirst Healthcare Services is 2.85 times less risky than HOYA Resort. The stock trades about -0.11 of its potential returns per unit of risk. The HOYA Resort Hotel is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,920 in HOYA Resort Hotel on October 28, 2024 and sell it today you would lose (590.00) from holding HOYA Resort Hotel or give up 20.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MedFirst Healthcare Services vs. HOYA Resort Hotel
Performance |
| Timeline |
| MedFirst Healthcare |
| HOYA Resort Hotel |
MedFirst Healthcare and HOYA Resort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MedFirst Healthcare and HOYA Resort
The main advantage of trading using opposite MedFirst Healthcare and HOYA Resort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MedFirst Healthcare position performs unexpectedly, HOYA Resort 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 HOYA Resort will offset losses from the drop in HOYA Resort's long position.| MedFirst Healthcare vs. Great Computer | MedFirst Healthcare vs. Alchip Technologies | MedFirst Healthcare vs. RichWave Technology Corp | MedFirst Healthcare vs. Chunghwa Precision Test |
| HOYA Resort vs. Taiwan Mobile Co | HOYA Resort vs. Phytohealth Corp | HOYA Resort vs. Standard Foods Corp | HOYA Resort vs. Tai Tung Communication |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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