Correlation Between Capitol Health and Fisher Paykel
Can any of the company-specific risk be diversified away by investing in both Capitol Health and Fisher Paykel 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 Capitol Health and Fisher Paykel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitol Health and Fisher Paykel Healthcare, you can compare the effects of market volatilities on Capitol Health and Fisher Paykel 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 Capitol Health with a short position of Fisher Paykel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Health and Fisher Paykel.
Diversification Opportunities for Capitol Health and Fisher Paykel
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capitol and Fisher is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Health and Fisher Paykel Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Paykel Healthcare and Capitol 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 Capitol Health are associated (or correlated) with Fisher Paykel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Paykel Healthcare has no effect on the direction of Capitol Health i.e., Capitol Health and Fisher Paykel go up and down completely randomly.
Pair Corralation between Capitol Health and Fisher Paykel
Assuming the 90 days trading horizon Capitol Health is expected to generate 1.08 times less return on investment than Fisher Paykel. In addition to that, Capitol Health is 1.52 times more volatile than Fisher Paykel Healthcare. It trades about 0.08 of its total potential returns per unit of risk. Fisher Paykel Healthcare is currently generating about 0.13 per unit of volatility. If you would invest 2,315 in Fisher Paykel Healthcare on August 25, 2024 and sell it today you would earn a total of 1,124 from holding Fisher Paykel Healthcare or generate 48.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitol Health vs. Fisher Paykel Healthcare
Performance |
| Timeline |
| Capitol Health |
| Fisher Paykel Healthcare |
Capitol Health and Fisher Paykel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitol Health and Fisher Paykel
The main advantage of trading using opposite Capitol Health and Fisher Paykel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Health position performs unexpectedly, Fisher Paykel 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 Fisher Paykel will offset losses from the drop in Fisher Paykel's long position.| Capitol Health vs. Inventis | Capitol Health vs. PM Capital Global | Capitol Health vs. Macquarie Group Ltd | Capitol Health vs. Wam Leaders |
| Fisher Paykel vs. Cleanaway Waste Management | Fisher Paykel vs. Hansen Technologies | Fisher Paykel vs. Clime Investment Management | Fisher Paykel vs. Microequities Asset Management |
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 Stocks Directory module to find actively traded stocks across global markets.
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