Correlation Between VARIOUS EATERIES and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and FEMALE HEALTH 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 VARIOUS EATERIES and FEMALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and FEMALE HEALTH, you can compare the effects of market volatilities on VARIOUS EATERIES and FEMALE HEALTH 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 VARIOUS EATERIES with a short position of FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and FEMALE HEALTH.
Diversification Opportunities for VARIOUS EATERIES and FEMALE HEALTH
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VARIOUS and FEMALE is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and FEMALE HEALTH
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to generate 0.56 times more return on investment than FEMALE HEALTH. However, VARIOUS EATERIES LS is 1.77 times less risky than FEMALE HEALTH. It trades about -0.14 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.21 per unit of risk. If you would invest 18.00 in VARIOUS EATERIES LS on November 27, 2024 and sell it today you would lose (4.00) from holding VARIOUS EATERIES LS or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. FEMALE HEALTH
Performance |
| Timeline |
| VARIOUS EATERIES |
| FEMALE HEALTH |
VARIOUS EATERIES and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and FEMALE HEALTH
The main advantage of trading using opposite VARIOUS EATERIES and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| VARIOUS EATERIES vs. Salesforce | VARIOUS EATERIES vs. Cars Inc | VARIOUS EATERIES vs. Grupo Carso SAB | VARIOUS EATERIES vs. Commercial Vehicle Group |
| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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