Correlation Between SHIP HEALTHCARE and HUSQVARNA
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and HUSQVARNA 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 HUSQVARNA 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 HUSQVARNA B , you can compare the effects of market volatilities on SHIP HEALTHCARE and HUSQVARNA 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 HUSQVARNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and HUSQVARNA.
Diversification Opportunities for SHIP HEALTHCARE and HUSQVARNA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIP and HUSQVARNA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and HUSQVARNA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUSQVARNA B 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 HUSQVARNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUSQVARNA B has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and HUSQVARNA go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and HUSQVARNA
Assuming the 90 days horizon SHIP HEALTHCARE is expected to generate 12.84 times less return on investment than HUSQVARNA. But when comparing it to its historical volatility, SHIP HEALTHCARE HLDGINC is 4.0 times less risky than HUSQVARNA. It trades about 0.03 of its potential returns per unit of risk. HUSQVARNA B is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 401.00 in HUSQVARNA B on August 31, 2024 and sell it today you would earn a total of 139.00 from holding HUSQVARNA B or generate 34.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. HUSQVARNA B
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| HUSQVARNA B |
SHIP HEALTHCARE and HUSQVARNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and HUSQVARNA
The main advantage of trading using opposite SHIP HEALTHCARE and HUSQVARNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, HUSQVARNA 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 HUSQVARNA will offset losses from the drop in HUSQVARNA's long position.| SHIP HEALTHCARE vs. CVW CLEANTECH INC | SHIP HEALTHCARE vs. Science Applications International | SHIP HEALTHCARE vs. Ultra Clean Holdings | SHIP HEALTHCARE vs. Automatic Data Processing |
| HUSQVARNA vs. Uber Technologies | HUSQVARNA vs. Digilife Technologies Limited | HUSQVARNA vs. NTG Nordic Transport | HUSQVARNA vs. Gold Road Resources |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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