Correlation Between Alfa Financial and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and MEDICAL FACILITIES 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 Alfa Financial and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Alfa Financial and MEDICAL FACILITIES 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 Alfa Financial with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and MEDICAL FACILITIES.
Diversification Opportunities for Alfa Financial and MEDICAL FACILITIES
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alfa and MEDICAL is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Alfa Financial i.e., Alfa Financial and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Alfa Financial and MEDICAL FACILITIES
Assuming the 90 days trading horizon Alfa Financial is expected to generate 1.82 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, Alfa Financial Software is 1.09 times less risky than MEDICAL FACILITIES. It trades about 0.14 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 950.00 in MEDICAL FACILITIES NEW on August 31, 2024 and sell it today you would earn a total of 120.00 from holding MEDICAL FACILITIES NEW or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Alfa Financial Software |
| MEDICAL FACILITIES NEW |
Alfa Financial and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and MEDICAL FACILITIES
The main advantage of trading using opposite Alfa Financial and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Alfa Financial vs. Texas Roadhouse | Alfa Financial vs. G III Apparel Group | Alfa Financial vs. Transport International Holdings | Alfa Financial vs. GOLD ROAD RES |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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