Correlation Between Aedifica and HealthCare
Can any of the company-specific risk be diversified away by investing in both Aedifica and HealthCare 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 Aedifica and HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedifica SA and HealthCare, you can compare the effects of market volatilities on Aedifica and HealthCare 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 Aedifica with a short position of HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedifica and HealthCare.
Diversification Opportunities for Aedifica and HealthCare
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aedifica and HealthCare is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aedifica SA and HealthCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthCare and Aedifica 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 Aedifica SA are associated (or correlated) with HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthCare has no effect on the direction of Aedifica i.e., Aedifica and HealthCare go up and down completely randomly.
Pair Corralation between Aedifica and HealthCare
If you would invest 5,783 in Aedifica SA on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Aedifica SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Aedifica SA vs. HealthCare
Performance |
| Timeline |
| Aedifica SA |
| HealthCare |
Aedifica and HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedifica and HealthCare
The main advantage of trading using opposite Aedifica and HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedifica position performs unexpectedly, HealthCare 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 HealthCare will offset losses from the drop in HealthCare's long position.The idea behind Aedifica SA and HealthCare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| HealthCare vs. The Joint Corp | HealthCare vs. LENSAR Inc | HealthCare vs. Cardinal Health | HealthCare vs. Merit Medical Systems |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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