Correlation Between Healthcare and Lens Technology
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By analyzing existing cross correlation between Healthcare Co and Lens Technology Co, you can compare the effects of market volatilities on Healthcare and Lens Technology 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 Healthcare with a short position of Lens Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and Lens Technology.
Diversification Opportunities for Healthcare and Lens Technology
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Healthcare and Lens is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Co and Lens Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lens Technology and 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 Healthcare Co are associated (or correlated) with Lens Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lens Technology has no effect on the direction of Healthcare i.e., Healthcare and Lens Technology go up and down completely randomly.
Pair Corralation between Healthcare and Lens Technology
Assuming the 90 days trading horizon Healthcare Co is expected to under-perform the Lens Technology. In addition to that, Healthcare is 1.03 times more volatile than Lens Technology Co. It trades about -0.4 of its total potential returns per unit of risk. Lens Technology Co is currently generating about 0.09 per unit of volatility. If you would invest 2,198 in Lens Technology Co on October 14, 2024 and sell it today you would earn a total of 96.00 from holding Lens Technology Co or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Co vs. Lens Technology Co
Performance |
| Timeline |
| Healthcare |
| Lens Technology |
Healthcare and Lens Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare and Lens Technology
The main advantage of trading using opposite Healthcare and Lens Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare position performs unexpectedly, Lens Technology 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 Lens Technology will offset losses from the drop in Lens Technology's long position.| Healthcare vs. Chongqing Brewery Co | Healthcare vs. Jinhui Liquor Co | Healthcare vs. Holitech Technology Co | Healthcare vs. Eyebright Medical Technology |
| Lens Technology vs. Biwin Storage Technology | Lens Technology vs. PetroChina Co Ltd | Lens Technology vs. Industrial and Commercial | Lens Technology vs. China Construction Bank |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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