Correlation Between Active Health and Newron Sport
Can any of the company-specific risk be diversified away by investing in both Active Health and Newron Sport 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 Newron Sport 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 Newron Sport, you can compare the effects of market volatilities on Active Health and Newron Sport 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 Newron Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Active Health and Newron Sport.
Diversification Opportunities for Active Health and Newron Sport
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Active and Newron is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Active Health Foods and Newron Sport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newron Sport 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 Newron Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newron Sport has no effect on the direction of Active Health i.e., Active Health and Newron Sport go up and down completely randomly.
Pair Corralation between Active Health and Newron Sport
Given the investment horizon of 90 days Active Health is expected to generate 5.1 times less return on investment than Newron Sport. But when comparing it to its historical volatility, Active Health Foods is 2.44 times less risky than Newron Sport. It trades about 0.06 of its potential returns per unit of risk. Newron Sport is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.06 in Newron Sport on August 25, 2024 and sell it today you would lose (0.04) from holding Newron Sport or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Active Health Foods vs. Newron Sport
Performance |
| Timeline |
| Active Health Foods |
| Newron Sport |
Active Health and Newron Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Active Health and Newron Sport
The main advantage of trading using opposite Active Health and Newron Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Active Health position performs unexpectedly, Newron Sport 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 Newron Sport will offset losses from the drop in Newron Sport's long position.| Active Health vs. Ventana Biotech | Active Health vs. Gold Ent Group | Active Health vs. Profitable Develop | Active Health vs. American Leisure Holdings |
| Newron Sport vs. Absolute Health and | Newron Sport vs. China Health Management | Newron Sport vs. Embrace Change Acquisition | Newron Sport vs. TransAKT |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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