Correlation Between Elis SA and Universal Health
Can any of the company-specific risk be diversified away by investing in both Elis SA and Universal 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 Elis SA and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elis SA and Universal Health Realty, you can compare the effects of market volatilities on Elis SA and Universal 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 Elis SA with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and Universal Health.
Diversification Opportunities for Elis SA and Universal Health
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elis and Universal is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and Universal Health Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Realty and Elis SA 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 Elis SA are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Realty has no effect on the direction of Elis SA i.e., Elis SA and Universal Health go up and down completely randomly.
Pair Corralation between Elis SA and Universal Health
Assuming the 90 days horizon Elis SA is expected to generate 0.94 times more return on investment than Universal Health. However, Elis SA is 1.07 times less risky than Universal Health. It trades about 0.07 of its potential returns per unit of risk. Universal Health Realty is currently generating about 0.0 per unit of risk. If you would invest 1,205 in Elis SA on August 26, 2024 and sell it today you would earn a total of 754.00 from holding Elis SA or generate 62.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elis SA vs. Universal Health Realty
Performance |
| Timeline |
| Elis SA |
| Universal Health Realty |
Elis SA and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elis SA and Universal Health
The main advantage of trading using opposite Elis SA and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elis SA position performs unexpectedly, Universal 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 Universal Health will offset losses from the drop in Universal Health's long position.The idea behind Elis SA and Universal Health Realty pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Universal Health vs. Welltower | Universal Health vs. Sabra Health Care | Universal Health vs. National Health Investors | Universal Health vs. The GEO Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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