Correlation Between Absolute Health and Active Health
Can any of the company-specific risk be diversified away by investing in both Absolute Health and Active Health 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 Absolute Health and Active Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Health and and Active Health Foods, you can compare the effects of market volatilities on Absolute Health and Active Health 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 Absolute Health with a short position of Active Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Health and Active Health.
Diversification Opportunities for Absolute Health and Active Health
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Absolute and Active is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Health and and Active Health Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active Health Foods and Absolute 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 Absolute Health and are associated (or correlated) with Active Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active Health Foods has no effect on the direction of Absolute Health i.e., Absolute Health and Active Health go up and down completely randomly.
Pair Corralation between Absolute Health and Active Health
If you would invest 0.01 in Active Health Foods on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Active Health Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Health and vs. Active Health Foods
Performance |
| Timeline |
| Absolute Health |
| Active Health Foods |
Absolute Health and Active Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Health and Active Health
The main advantage of trading using opposite Absolute Health and Active Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Health position performs unexpectedly, Active Health 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 Active Health will offset losses from the drop in Active Health's long position.| Absolute Health vs. Gemz Corp | Absolute Health vs. AVVAA World Health | Absolute Health vs. Newron Sport | Absolute Health vs. Tanke Biosciences |
| Active Health vs. Embotelladora Andina SA | Active Health vs. Signet International Holdings | Active Health vs. National Beverage Corp | Active Health vs. PT Astra International |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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