Correlation Between SHIP HEALTHCARE and Ming Le
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and Ming Le 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 Ming Le 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 Ming Le Sports, you can compare the effects of market volatilities on SHIP HEALTHCARE and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Ming Le.
Diversification Opportunities for SHIP HEALTHCARE and Ming Le
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SHIP and Ming is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Ming Le go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Ming Le
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to under-perform the Ming Le. But the stock apears to be less risky and, when comparing its historical volatility, SHIP HEALTHCARE HLDGINC is 3.44 times less risky than Ming Le. The stock trades about -0.1 of its potential returns per unit of risk. The Ming Le Sports is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Ming Le Sports on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Ming Le Sports or generate 33.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Ming Le Sports
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Ming Le Sports |
SHIP HEALTHCARE and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Ming Le
The main advantage of trading using opposite SHIP HEALTHCARE and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| SHIP HEALTHCARE vs. Becton Dickinson and | SHIP HEALTHCARE vs. HOYA Corporation | SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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