Correlation Between Bank of Queensland and Healthco Healthcare
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland and Healthco Healthcare 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 Bank of Queensland and Healthco Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Queensland and Healthco Healthcare and, you can compare the effects of market volatilities on Bank of Queensland and Healthco Healthcare 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 Bank of Queensland with a short position of Healthco Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Healthco Healthcare.
Diversification Opportunities for Bank of Queensland and Healthco Healthcare
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Healthco is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and Healthco Healthcare and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthco Healthcare and and Bank of Queensland 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 Bank of Queensland are associated (or correlated) with Healthco Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthco Healthcare and has no effect on the direction of Bank of Queensland i.e., Bank of Queensland and Healthco Healthcare go up and down completely randomly.
Pair Corralation between Bank of Queensland and Healthco Healthcare
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 0.53 times more return on investment than Healthco Healthcare. However, Bank of Queensland is 1.87 times less risky than Healthco Healthcare. It trades about 0.03 of its potential returns per unit of risk. Healthco Healthcare and is currently generating about -0.07 per unit of risk. If you would invest 10,220 in Bank of Queensland on September 2, 2024 and sell it today you would earn a total of 107.00 from holding Bank of Queensland or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Queensland vs. Healthco Healthcare and
Performance |
| Timeline |
| Bank of Queensland |
| Healthco Healthcare and |
Bank of Queensland and Healthco Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Queensland and Healthco Healthcare
The main advantage of trading using opposite Bank of Queensland and Healthco Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland position performs unexpectedly, Healthco Healthcare 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 Healthco Healthcare will offset losses from the drop in Healthco Healthcare's long position.| Bank of Queensland vs. Imricor Medical Systems | Bank of Queensland vs. Midway | Bank of Queensland vs. Aristocrat Leisure | Bank of Queensland vs. iShares Global Healthcare |
| Healthco Healthcare vs. Scentre Group | Healthco Healthcare vs. Vicinity Centres Re | Healthco Healthcare vs. Charter Hall Retail | Healthco Healthcare vs. Cromwell Property Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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