Correlation Between SHIP HEALTHCARE and ALEFARM BREWING
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and ALEFARM BREWING 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 SHIP HEALTHCARE and ALEFARM BREWING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and ALEFARM BREWING DK 05, you can compare the effects of market volatilities on SHIP HEALTHCARE and ALEFARM BREWING 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 SHIP HEALTHCARE with a short position of ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and ALEFARM BREWING.
Diversification Opportunities for SHIP HEALTHCARE and ALEFARM BREWING
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SHIP and ALEFARM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK and SHIP 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 SHIP HEALTHCARE HLDGINC are associated (or correlated) with ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and ALEFARM BREWING go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and ALEFARM BREWING
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 0.31 times more return on investment than ALEFARM BREWING. However, SHIP HEALTHCARE HLDGINC is 3.26 times less risky than ALEFARM BREWING. It trades about 0.02 of its potential returns per unit of risk. ALEFARM BREWING DK 05 is currently generating about -0.03 per unit of risk. If you would invest 1,320 in SHIP HEALTHCARE HLDGINC on September 13, 2024 and sell it today you would earn a total of 20.00 from holding SHIP HEALTHCARE HLDGINC or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. ALEFARM BREWING DK 05
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| ALEFARM BREWING DK |
SHIP HEALTHCARE and ALEFARM BREWING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and ALEFARM BREWING
The main advantage of trading using opposite SHIP HEALTHCARE and ALEFARM BREWING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, ALEFARM BREWING 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 ALEFARM BREWING will offset losses from the drop in ALEFARM BREWING's long position.| SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings | SHIP HEALTHCARE vs. SIVERS SEMICONDUCTORS AB | SHIP HEALTHCARE vs. NorAm Drilling AS |
| ALEFARM BREWING vs. Corporate Travel Management | ALEFARM BREWING vs. Sumitomo Rubber Industries | ALEFARM BREWING vs. SANOK RUBBER ZY | ALEFARM BREWING vs. Jupiter Fund Management |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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