Correlation Between Astar and MPH Health
Can any of the company-specific risk be diversified away by investing in both Astar and MPH 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 Astar and MPH Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and MPH Health Care, you can compare the effects of market volatilities on Astar and MPH 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 Astar with a short position of MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and MPH Health.
Diversification Opportunities for Astar and MPH Health
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astar and MPH is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Astar and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care and Astar 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 Astar are associated (or correlated) with MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of Astar i.e., Astar and MPH Health go up and down completely randomly.
Pair Corralation between Astar and MPH Health
Assuming the 90 days trading horizon Astar is expected to under-perform the MPH Health. In addition to that, Astar is 2.42 times more volatile than MPH Health Care. It trades about -0.15 of its total potential returns per unit of risk. MPH Health Care is currently generating about -0.03 per unit of volatility. If you would invest 2,420 in MPH Health Care on October 11, 2024 and sell it today you would lose (40.00) from holding MPH Health Care or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Astar vs. MPH Health Care
Performance |
| Timeline |
| Astar |
| MPH Health Care |
Astar and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and MPH Health
The main advantage of trading using opposite Astar and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, MPH 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 MPH Health will offset losses from the drop in MPH Health's long position.The idea behind Astar and MPH Health Care pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MPH Health vs. TYSON FOODS A | MPH Health vs. ADRIATIC METALS LS 013355 | MPH Health vs. Zijin Mining Group | MPH Health vs. Astral Foods Limited |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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