Correlation Between Abingdon Health and Vitec Software
Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Vitec Software 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 Vitec Software 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 Vitec Software Group, you can compare the effects of market volatilities on Abingdon Health and Vitec Software 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 Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Vitec Software.
Diversification Opportunities for Abingdon Health and Vitec Software
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Abingdon and Vitec is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of Abingdon Health i.e., Abingdon Health and Vitec Software go up and down completely randomly.
Pair Corralation between Abingdon Health and Vitec Software
Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 0.72 times more return on investment than Vitec Software. However, Abingdon Health Plc is 1.39 times less risky than Vitec Software. It trades about 0.32 of its potential returns per unit of risk. Vitec Software Group is currently generating about 0.05 per unit of risk. If you would invest 725.00 in Abingdon Health Plc on October 15, 2024 and sell it today you would earn a total of 75.00 from holding Abingdon Health Plc or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abingdon Health Plc vs. Vitec Software Group
Performance |
| Timeline |
| Abingdon Health Plc |
| Vitec Software Group |
Abingdon Health and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Vitec Software
The main advantage of trading using opposite Abingdon Health and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health position performs unexpectedly, Vitec Software 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| Abingdon Health vs. TBC Bank Group | Abingdon Health vs. Livermore Investments Group | Abingdon Health vs. Mobius Investment Trust | Abingdon Health vs. Seraphim Space Investment |
| Vitec Software vs. Compal Electronics GDR | Vitec Software vs. Atresmedia | Vitec Software vs. Scandinavian Tobacco Group | Vitec Software vs. MediaZest 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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