Correlation Between Absolute Health and CLST Holdings
Can any of the company-specific risk be diversified away by investing in both Absolute Health and CLST Holdings 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 CLST Holdings 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 CLST Holdings, you can compare the effects of market volatilities on Absolute Health and CLST Holdings 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 CLST Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Health and CLST Holdings.
Diversification Opportunities for Absolute Health and CLST Holdings
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Absolute and CLST is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Health and and CLST Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLST Holdings 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 CLST Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLST Holdings has no effect on the direction of Absolute Health i.e., Absolute Health and CLST Holdings go up and down completely randomly.
Pair Corralation between Absolute Health and CLST Holdings
Given the investment horizon of 90 days Absolute Health is expected to generate 1.14 times less return on investment than CLST Holdings. In addition to that, Absolute Health is 2.03 times more volatile than CLST Holdings. It trades about 0.05 of its total potential returns per unit of risk. CLST Holdings is currently generating about 0.12 per unit of volatility. If you would invest 3.70 in CLST Holdings on August 30, 2024 and sell it today you would lose (0.70) from holding CLST Holdings or give up 18.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.41% |
| Values | Daily Returns |
Absolute Health and vs. CLST Holdings
Performance |
| Timeline |
| Absolute Health |
| CLST Holdings |
Absolute Health and CLST Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Health and CLST Holdings
The main advantage of trading using opposite Absolute Health and CLST Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Health position performs unexpectedly, CLST Holdings 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 CLST Holdings will offset losses from the drop in CLST Holdings' long position.| Absolute Health vs. Gemz Corp | Absolute Health vs. AVVAA World Health | Absolute Health vs. Newron Sport | Absolute Health vs. Tanke Biosciences |
| CLST Holdings vs. Radcom | CLST Holdings vs. Stratasys | CLST Holdings vs. MGIC Investment Corp | CLST Holdings vs. Cincinnati Financial |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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