Correlation Between Advanced Micro and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Hospital Mater 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 Advanced Micro and Hospital Mater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Hospital Mater Dei, you can compare the effects of market volatilities on Advanced Micro and Hospital Mater 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 Advanced Micro with a short position of Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Hospital Mater.
Diversification Opportunities for Advanced Micro and Hospital Mater
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advanced and Hospital is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of Advanced Micro i.e., Advanced Micro and Hospital Mater go up and down completely randomly.
Pair Corralation between Advanced Micro and Hospital Mater
Assuming the 90 days trading horizon Advanced Micro Devices is expected to generate 1.21 times more return on investment than Hospital Mater. However, Advanced Micro is 1.21 times more volatile than Hospital Mater Dei. It trades about 0.04 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about -0.09 per unit of risk. If you would invest 7,329 in Advanced Micro Devices on October 11, 2024 and sell it today you would earn a total of 1,871 from holding Advanced Micro Devices or generate 25.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Hospital Mater Dei
Performance |
| Timeline |
| Advanced Micro Devices |
| Hospital Mater Dei |
Advanced Micro and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Hospital Mater
The main advantage of trading using opposite Advanced Micro and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Hospital Mater 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 Hospital Mater will offset losses from the drop in Hospital Mater's long position.| Advanced Micro vs. Annaly Capital Management, | Advanced Micro vs. Charter Communications | Advanced Micro vs. Darden Restaurants, | Advanced Micro vs. Zoom Video Communications |
| Hospital Mater vs. HCA Healthcare, | Hospital Mater vs. Universal Health Services, | Hospital Mater vs. Energisa SA | Hospital Mater vs. BTG Pactual Logstica |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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