Correlation Between SHIP HEALTHCARE and Airports
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and Airports 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 Airports 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 Airports of Thailand, you can compare the effects of market volatilities on SHIP HEALTHCARE and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Airports.
Diversification Opportunities for SHIP HEALTHCARE and Airports
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SHIP and Airports is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Airports go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Airports
Assuming the 90 days horizon SHIP HEALTHCARE is expected to generate 19.24 times less return on investment than Airports. But when comparing it to its historical volatility, SHIP HEALTHCARE HLDGINC is 13.31 times less risky than Airports. It trades about 0.15 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Airports of Thailand on September 12, 2024 and sell it today you would earn a total of 81.00 from holding Airports of Thailand or generate 95.29% 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. Airports of Thailand
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Airports of Thailand |
SHIP HEALTHCARE and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Airports
The main advantage of trading using opposite SHIP HEALTHCARE and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' 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 |
| Airports vs. Fast Retailing Co | Airports vs. COSTCO WHOLESALE CDR | Airports vs. ALTAIR RES INC | Airports vs. Norwegian Air Shuttle |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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