Correlation Between SHIP HEALTHCARE and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and Sany Heavy 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 Sany Heavy 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 Sany Heavy Equipment, you can compare the effects of market volatilities on SHIP HEALTHCARE and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Sany Heavy.
Diversification Opportunities for SHIP HEALTHCARE and Sany Heavy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SHIP and Sany is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Sany Heavy go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Sany Heavy
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 0.84 times more return on investment than Sany Heavy. However, SHIP HEALTHCARE HLDGINC is 1.2 times less risky than Sany Heavy. It trades about 0.04 of its potential returns per unit of risk. Sany Heavy Equipment is currently generating about -0.01 per unit of risk. If you would invest 992.00 in SHIP HEALTHCARE HLDGINC on September 4, 2024 and sell it today you would earn a total of 378.00 from holding SHIP HEALTHCARE HLDGINC or generate 38.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Sany Heavy Equipment
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Sany Heavy Equipment |
SHIP HEALTHCARE and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Sany Heavy
The main advantage of trading using opposite SHIP HEALTHCARE and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.| SHIP HEALTHCARE vs. THRACE PLASTICS | SHIP HEALTHCARE vs. Rayonier Advanced Materials | SHIP HEALTHCARE vs. SANOK RUBBER ZY | SHIP HEALTHCARE vs. Gruppo Mutuionline SpA |
| Sany Heavy vs. Komatsu | Sany Heavy vs. CNH Industrial NV | Sany Heavy vs. KUBOTA P ADR20 | Sany Heavy vs. Hitachi Construction Machinery |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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