Correlation Between Avanos Medical and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Avanos Medical and Safestore Holdings 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 Avanos Medical and Safestore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and Safestore Holdings plc, you can compare the effects of market volatilities on Avanos Medical and Safestore Holdings 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 Avanos Medical with a short position of Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and Safestore Holdings.
Diversification Opportunities for Avanos Medical and Safestore Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Avanos and Safestore is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc and Avanos Medical 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 Avanos Medical are associated (or correlated) with Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Avanos Medical i.e., Avanos Medical and Safestore Holdings go up and down completely randomly.
Pair Corralation between Avanos Medical and Safestore Holdings
Assuming the 90 days trading horizon Avanos Medical is expected to generate 1.54 times more return on investment than Safestore Holdings. However, Avanos Medical is 1.54 times more volatile than Safestore Holdings plc. It trades about -0.03 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.08 per unit of risk. If you would invest 1,750 in Avanos Medical on October 17, 2024 and sell it today you would lose (250.00) from holding Avanos Medical or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.32% |
| Values | Daily Returns |
Avanos Medical vs. Safestore Holdings plc
Performance |
| Timeline |
| Avanos Medical |
| Safestore Holdings plc |
Avanos Medical and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and Safestore Holdings
The main advantage of trading using opposite Avanos Medical and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| Avanos Medical vs. Tyson Foods | Avanos Medical vs. CHRYSALIS INVESTMENTS LTD | Avanos Medical vs. WILLIS LEASE FIN | Avanos Medical vs. Performance Food Group |
| Safestore Holdings vs. Grupo Carso SAB | Safestore Holdings vs. GRUPO CARSO A1 | Safestore Holdings vs. Haier Smart Home | Safestore Holdings vs. Darden Restaurants |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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