Correlation Between SS Healthcare and Topco Technologies
Can any of the company-specific risk be diversified away by investing in both SS Healthcare and Topco Technologies 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 SS Healthcare and Topco Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS Healthcare Holding and Topco Technologies, you can compare the effects of market volatilities on SS Healthcare and Topco Technologies 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 SS Healthcare with a short position of Topco Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS Healthcare and Topco Technologies.
Diversification Opportunities for SS Healthcare and Topco Technologies
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 4198 and Topco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SS Healthcare Holding and Topco Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Technologies and SS 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 SS Healthcare Holding are associated (or correlated) with Topco Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Technologies has no effect on the direction of SS Healthcare i.e., SS Healthcare and Topco Technologies go up and down completely randomly.
Pair Corralation between SS Healthcare and Topco Technologies
Assuming the 90 days trading horizon SS Healthcare Holding is expected to generate 5.64 times more return on investment than Topco Technologies. However, SS Healthcare is 5.64 times more volatile than Topco Technologies. It trades about 0.02 of its potential returns per unit of risk. Topco Technologies is currently generating about -0.25 per unit of risk. If you would invest 3,150 in SS Healthcare Holding on October 20, 2024 and sell it today you would earn a total of 5.00 from holding SS Healthcare Holding or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SS Healthcare Holding vs. Topco Technologies
Performance |
| Timeline |
| SS Healthcare Holding |
| Topco Technologies |
SS Healthcare and Topco Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS Healthcare and Topco Technologies
The main advantage of trading using opposite SS Healthcare and Topco Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS Healthcare position performs unexpectedly, Topco Technologies 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 Topco Technologies will offset losses from the drop in Topco Technologies' long position.| SS Healthcare vs. RiTdisplay Corp | SS Healthcare vs. Far EasTone Telecommunications | SS Healthcare vs. Feng Ching Metal | SS Healthcare vs. Hunya Foods Co |
| Topco Technologies vs. Camellia Metal Co | Topco Technologies vs. Simple Mart Retail | Topco Technologies vs. Sunspring Metal Corp | Topco Technologies vs. Gamania Digital Entertainment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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