Correlation Between Abingdon Health and Futura Medical
Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Futura Medical 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 Futura Medical 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 Futura Medical, you can compare the effects of market volatilities on Abingdon Health and Futura Medical 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 Futura Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Futura Medical.
Diversification Opportunities for Abingdon Health and Futura Medical
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Abingdon and Futura is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Futura Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futura Medical 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 Futura Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futura Medical has no effect on the direction of Abingdon Health i.e., Abingdon Health and Futura Medical go up and down completely randomly.
Pair Corralation between Abingdon Health and Futura Medical
Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 0.35 times more return on investment than Futura Medical. However, Abingdon Health Plc is 2.89 times less risky than Futura Medical. It trades about 0.02 of its potential returns per unit of risk. Futura Medical is currently generating about -0.21 per unit of risk. If you would invest 800.00 in Abingdon Health Plc on November 6, 2024 and sell it today you would earn a total of 0.00 from holding Abingdon Health Plc or generate 0.0% 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. Futura Medical
Performance |
| Timeline |
| Abingdon Health Plc |
| Futura Medical |
Abingdon Health and Futura Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Futura Medical
The main advantage of trading using opposite Abingdon Health and Futura Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health position performs unexpectedly, Futura Medical 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 Futura Medical will offset losses from the drop in Futura Medical's long position.| Abingdon Health vs. Vitec Software Group | Abingdon Health vs. Herald Investment Trust | Abingdon Health vs. Take Two Interactive Software | Abingdon Health vs. Chrysalis Investments |
| Futura Medical vs. JPMorgan Japanese Investment | Futura Medical vs. Herald Investment Trust | Futura Medical vs. Kinnevik Investment AB | Futura Medical vs. Vietnam Enterprise Investments |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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