Correlation Between Active Health and First Colombia
Can any of the company-specific risk be diversified away by investing in both Active Health and First Colombia 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 Active Health and First Colombia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Active Health Foods and First Colombia Gold, you can compare the effects of market volatilities on Active Health and First Colombia 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 Active Health with a short position of First Colombia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Active Health and First Colombia.
Diversification Opportunities for Active Health and First Colombia
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Active and First is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Active Health Foods and First Colombia Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Colombia Gold and Active 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 Active Health Foods are associated (or correlated) with First Colombia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Colombia Gold has no effect on the direction of Active Health i.e., Active Health and First Colombia go up and down completely randomly.
Pair Corralation between Active Health and First Colombia
Given the investment horizon of 90 days Active Health Foods is expected to under-perform the First Colombia. But the pink sheet apears to be less risky and, when comparing its historical volatility, Active Health Foods is 33.0 times less risky than First Colombia. The pink sheet trades about -0.13 of its potential returns per unit of risk. The First Colombia Gold is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.01 in First Colombia Gold on September 20, 2024 and sell it today you would lose (0.01) from holding First Colombia Gold or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Active Health Foods vs. First Colombia Gold
Performance |
| Timeline |
| Active Health Foods |
| First Colombia Gold |
Active Health and First Colombia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Active Health and First Colombia
The main advantage of trading using opposite Active Health and First Colombia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Active Health position performs unexpectedly, First Colombia 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 First Colombia will offset losses from the drop in First Colombia's long position.| Active Health vs. V Group | Active Health vs. Fbec Worldwide | Active Health vs. Hiru Corporation | Active Health vs. Alkame Holdings |
| First Colombia vs. Green Planet Bio | First Colombia vs. Azure Holding Group | First Colombia vs. Four Leaf Acquisition | First Colombia vs. Opus Magnum Ameris |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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