Correlation Between Amedeo Air and Universal Health
Can any of the company-specific risk be diversified away by investing in both Amedeo Air and Universal Health 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 Amedeo Air and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and Universal Health Services, you can compare the effects of market volatilities on Amedeo Air and Universal Health 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 Amedeo Air with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and Universal Health.
Diversification Opportunities for Amedeo Air and Universal Health
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amedeo and Universal is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of Amedeo Air i.e., Amedeo Air and Universal Health go up and down completely randomly.
Pair Corralation between Amedeo Air and Universal Health
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 0.52 times more return on investment than Universal Health. However, Amedeo Air Four is 1.91 times less risky than Universal Health. It trades about 0.51 of its potential returns per unit of risk. Universal Health Services is currently generating about -0.02 per unit of risk. If you would invest 4,950 in Amedeo Air Four on August 30, 2024 and sell it today you would earn a total of 380.00 from holding Amedeo Air Four or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amedeo Air Four vs. Universal Health Services
Performance |
| Timeline |
| Amedeo Air Four |
| Universal Health Services |
Amedeo Air and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and Universal Health
The main advantage of trading using opposite Amedeo Air and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| Amedeo Air vs. Toyota Motor Corp | Amedeo Air vs. SoftBank Group Corp | Amedeo Air vs. OTP Bank Nyrt | Amedeo Air vs. Las Vegas Sands |
| Universal Health vs. Tungsten West PLC | Universal Health vs. Argo Group Limited | Universal Health vs. Hardide PLC | Universal Health vs. Versarien PLC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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