Correlation Between Advanced Medical and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Naturhouse 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 Advanced Medical and Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Naturhouse Health SA, you can compare the effects of market volatilities on Advanced Medical and Naturhouse 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 Advanced Medical with a short position of Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Naturhouse Health.
Diversification Opportunities for Advanced Medical and Naturhouse Health
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Naturhouse is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health and Advanced Medical 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 Advanced Medical Solutions are associated (or correlated) with Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Advanced Medical i.e., Advanced Medical and Naturhouse Health go up and down completely randomly.
Pair Corralation between Advanced Medical and Naturhouse Health
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to under-perform the Naturhouse Health. In addition to that, Advanced Medical is 1.51 times more volatile than Naturhouse Health SA. It trades about -0.21 of its total potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.11 per unit of volatility. If you would invest 170.00 in Naturhouse Health SA on October 11, 2024 and sell it today you would earn a total of 4.00 from holding Naturhouse Health SA or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Naturhouse Health SA
Performance |
| Timeline |
| Advanced Medical Sol |
| Naturhouse Health |
Advanced Medical and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Naturhouse Health
The main advantage of trading using opposite Advanced Medical and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Naturhouse 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Advanced Medical vs. Universal Health Services | Advanced Medical vs. MediaZest plc | Advanced Medical vs. Live Nation Entertainment | Advanced Medical vs. Samsung Electronics Co |
| Naturhouse Health vs. Tata Steel Limited | Naturhouse Health vs. Advanced Medical Solutions | Naturhouse Health vs. Deltex Medical Group | Naturhouse Health vs. Foresight Environmental Infrastructure |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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