Correlation Between HIM International and Cowealth Medical
Can any of the company-specific risk be diversified away by investing in both HIM International and Cowealth Medical 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 HIM International and Cowealth Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HIM International Music and Cowealth Medical Holding, you can compare the effects of market volatilities on HIM International and Cowealth Medical 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 HIM International with a short position of Cowealth Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIM International and Cowealth Medical.
Diversification Opportunities for HIM International and Cowealth Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HIM and Cowealth is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding HIM International Music and Cowealth Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowealth Medical Holding and HIM International 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 HIM International Music are associated (or correlated) with Cowealth Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowealth Medical Holding has no effect on the direction of HIM International i.e., HIM International and Cowealth Medical go up and down completely randomly.
Pair Corralation between HIM International and Cowealth Medical
Assuming the 90 days trading horizon HIM International Music is expected to generate 0.82 times more return on investment than Cowealth Medical. However, HIM International Music is 1.23 times less risky than Cowealth Medical. It trades about 0.02 of its potential returns per unit of risk. Cowealth Medical Holding is currently generating about -0.02 per unit of risk. If you would invest 11,700 in HIM International Music on November 28, 2024 and sell it today you would earn a total of 250.00 from holding HIM International Music or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HIM International Music vs. Cowealth Medical Holding
Performance |
| Timeline |
| HIM International Music |
| Cowealth Medical Holding |
HIM International and Cowealth Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HIM International and Cowealth Medical
The main advantage of trading using opposite HIM International and Cowealth Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIM International position performs unexpectedly, Cowealth Medical 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 Cowealth Medical will offset losses from the drop in Cowealth Medical's long position.| HIM International vs. Double Bond Chemical | HIM International vs. Asia Metal Industries | HIM International vs. Camellia Metal Co | HIM International vs. First Insurance Co |
| Cowealth Medical vs. Kinsus Interconnect Technology | Cowealth Medical vs. CVC Technologies | Cowealth Medical vs. Etrend Hightech | Cowealth Medical vs. Arbor Technology |
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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