Correlation Between Power Wind and SS Healthcare
Can any of the company-specific risk be diversified away by investing in both Power Wind and SS 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 Power Wind and SS Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Wind Health and SS Healthcare Holding, you can compare the effects of market volatilities on Power Wind and SS 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 Power Wind with a short position of SS Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Wind and SS Healthcare.
Diversification Opportunities for Power Wind and SS Healthcare
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Power and 4198 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Power Wind Health and SS Healthcare Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS Healthcare Holding and Power Wind 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 Power Wind Health are associated (or correlated) with SS Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS Healthcare Holding has no effect on the direction of Power Wind i.e., Power Wind and SS Healthcare go up and down completely randomly.
Pair Corralation between Power Wind and SS Healthcare
Assuming the 90 days trading horizon Power Wind Health is expected to generate 0.51 times more return on investment than SS Healthcare. However, Power Wind Health is 1.95 times less risky than SS Healthcare. It trades about -0.01 of its potential returns per unit of risk. SS Healthcare Holding is currently generating about -0.05 per unit of risk. If you would invest 11,735 in Power Wind Health on August 31, 2024 and sell it today you would lose (485.00) from holding Power Wind Health or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Wind Health vs. SS Healthcare Holding
Performance |
| Timeline |
| Power Wind Health |
| SS Healthcare Holding |
Power Wind and SS Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Wind and SS Healthcare
The main advantage of trading using opposite Power Wind and SS Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Wind position performs unexpectedly, SS 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 SS Healthcare will offset losses from the drop in SS Healthcare's long position.| Power Wind vs. Sunny Friend Environmental | Power Wind vs. Cleanaway Co | Power Wind vs. Charoen Pokphand Enterprise | Power Wind vs. TTET Union Corp |
| SS Healthcare vs. Universal Vision Biotechnology | SS Healthcare vs. Excelsior Medical Co | SS Healthcare vs. Hi Clearance | SS Healthcare vs. Pacific Hospital Supply |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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