Correlation Between Galaxy Software and MedFirst Healthcare
Can any of the company-specific risk be diversified away by investing in both Galaxy Software and MedFirst Healthcare 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 Galaxy Software and MedFirst Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Software Services and MedFirst Healthcare Services, you can compare the effects of market volatilities on Galaxy Software and MedFirst Healthcare 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 Galaxy Software with a short position of MedFirst Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Software and MedFirst Healthcare.
Diversification Opportunities for Galaxy Software and MedFirst Healthcare
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Galaxy and MedFirst is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Software Services and MedFirst Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedFirst Healthcare and Galaxy Software 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 Galaxy Software Services are associated (or correlated) with MedFirst Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedFirst Healthcare has no effect on the direction of Galaxy Software i.e., Galaxy Software and MedFirst Healthcare go up and down completely randomly.
Pair Corralation between Galaxy Software and MedFirst Healthcare
Assuming the 90 days trading horizon Galaxy Software Services is expected to generate 24.96 times more return on investment than MedFirst Healthcare. However, Galaxy Software is 24.96 times more volatile than MedFirst Healthcare Services. It trades about 0.05 of its potential returns per unit of risk. MedFirst Healthcare Services is currently generating about 0.0 per unit of risk. If you would invest 5,671 in Galaxy Software Services on October 28, 2024 and sell it today you would earn a total of 6,879 from holding Galaxy Software Services or generate 121.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Software Services vs. MedFirst Healthcare Services
Performance |
| Timeline |
| Galaxy Software Services |
| MedFirst Healthcare |
Galaxy Software and MedFirst Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Software and MedFirst Healthcare
The main advantage of trading using opposite Galaxy Software and MedFirst Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Software position performs unexpectedly, MedFirst Healthcare 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 MedFirst Healthcare will offset losses from the drop in MedFirst Healthcare's long position.| Galaxy Software vs. Union Insurance Co | Galaxy Software vs. U Tech Media Corp | Galaxy Software vs. Cayenne Entertainment Technology | Galaxy Software vs. U Media Communications |
| MedFirst Healthcare vs. Great Computer | MedFirst Healthcare vs. Alchip Technologies | MedFirst Healthcare vs. RichWave Technology Corp | MedFirst Healthcare vs. Chunghwa Precision Test |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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