Correlation Between MPH Health and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both MPH Health and MIRAMAR HOTEL 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 MPH Health and MIRAMAR HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPH Health Care and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on MPH Health and MIRAMAR HOTEL 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 MPH Health with a short position of MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPH Health and MIRAMAR HOTEL.
Diversification Opportunities for MPH Health and MIRAMAR HOTEL
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MPH and MIRAMAR is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding MPH Health Care and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV and MPH Health 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 MPH Health Care are associated (or correlated) with MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of MPH Health i.e., MPH Health and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between MPH Health and MIRAMAR HOTEL
Assuming the 90 days trading horizon MPH Health Care is expected to under-perform the MIRAMAR HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, MPH Health Care is 1.7 times less risky than MIRAMAR HOTEL. The stock trades about -0.07 of its potential returns per unit of risk. The MIRAMAR HOTEL INV is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 87.00 in MIRAMAR HOTEL INV on October 18, 2024 and sell it today you would earn a total of 26.00 from holding MIRAMAR HOTEL INV or generate 29.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPH Health Care vs. MIRAMAR HOTEL INV
Performance |
| Timeline |
| MPH Health Care |
| MIRAMAR HOTEL INV |
MPH Health and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPH Health and MIRAMAR HOTEL
The main advantage of trading using opposite MPH Health and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPH Health position performs unexpectedly, MIRAMAR HOTEL 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| MPH Health vs. DIVERSIFIED ROYALTY | MPH Health vs. SEI INVESTMENTS | MPH Health vs. JLF INVESTMENT | MPH Health vs. ECHO INVESTMENT ZY |
| MIRAMAR HOTEL vs. MPH Health Care | MIRAMAR HOTEL vs. Cardinal Health | MIRAMAR HOTEL vs. CLOVER HEALTH INV | MIRAMAR HOTEL vs. Computershare Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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