Correlation Between Abingdon Health and Universal Health
Can any of the company-specific risk be diversified away by investing in both Abingdon Health 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 Abingdon Health and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Universal Health Services, you can compare the effects of market volatilities on Abingdon Health 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 Abingdon Health with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Universal Health.
Diversification Opportunities for Abingdon Health and Universal Health
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abingdon and Universal is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc 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 Abingdon 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 Abingdon Health Plc 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 Abingdon Health i.e., Abingdon Health and Universal Health go up and down completely randomly.
Pair Corralation between Abingdon Health and Universal Health
Assuming the 90 days trading horizon Abingdon Health Plc is expected to under-perform the Universal Health. In addition to that, Abingdon Health is 2.01 times more volatile than Universal Health Services. It trades about -0.16 of its total potential returns per unit of risk. Universal Health Services is currently generating about -0.1 per unit of volatility. If you would invest 20,903 in Universal Health Services on September 4, 2024 and sell it today you would lose (522.00) from holding Universal Health Services or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Abingdon Health Plc vs. Universal Health Services
Performance |
| Timeline |
| Abingdon Health Plc |
| Universal Health Services |
Abingdon Health and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Universal Health
The main advantage of trading using opposite Abingdon Health and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health 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.| Abingdon Health vs. Greenroc Mining PLC | Abingdon Health vs. Endeavour Mining Corp | Abingdon Health vs. Anglesey Mining | Abingdon Health vs. Naked Wines plc |
| Universal Health vs. Samsung Electronics Co | Universal Health vs. Samsung Electronics Co | Universal Health vs. Hyundai Motor | Universal Health vs. Toyota Motor Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |