Correlation Between SHIP HEALTHCARE and PEH WERTPAPIER
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and PEH WERTPAPIER 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 PEH WERTPAPIER 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 PEH WERTPAPIER, you can compare the effects of market volatilities on SHIP HEALTHCARE and PEH WERTPAPIER 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 PEH WERTPAPIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and PEH WERTPAPIER.
Diversification Opportunities for SHIP HEALTHCARE and PEH WERTPAPIER
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SHIP and PEH is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and PEH WERTPAPIER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEH WERTPAPIER 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 PEH WERTPAPIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEH WERTPAPIER has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and PEH WERTPAPIER go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and PEH WERTPAPIER
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 3.1 times more return on investment than PEH WERTPAPIER. However, SHIP HEALTHCARE is 3.1 times more volatile than PEH WERTPAPIER. It trades about 0.06 of its potential returns per unit of risk. PEH WERTPAPIER is currently generating about 0.07 per unit of risk. If you would invest 855.00 in SHIP HEALTHCARE HLDGINC on September 14, 2024 and sell it today you would earn a total of 495.00 from holding SHIP HEALTHCARE HLDGINC or generate 57.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. PEH WERTPAPIER
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| PEH WERTPAPIER |
SHIP HEALTHCARE and PEH WERTPAPIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and PEH WERTPAPIER
The main advantage of trading using opposite SHIP HEALTHCARE and PEH WERTPAPIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, PEH WERTPAPIER 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 PEH WERTPAPIER will offset losses from the drop in PEH WERTPAPIER'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 |
| PEH WERTPAPIER vs. UNIVMUSIC GRPADR050 | PEH WERTPAPIER vs. TRAVEL LEISURE DL 01 | PEH WERTPAPIER vs. Tencent Music Entertainment | PEH WERTPAPIER vs. ETFS Coffee ETC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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