Correlation Between Capitol Health and Health
Can any of the company-specific risk be diversified away by investing in both Capitol Health and 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 Capitol Health and Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitol Health and Health and Plant, you can compare the effects of market volatilities on Capitol Health and 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 Capitol Health with a short position of Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Health and Health.
Diversification Opportunities for Capitol Health and Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capitol and Health is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Health and Health and Plant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health and Plant 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 Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health and Plant has no effect on the direction of Capitol Health i.e., Capitol Health and Health go up and down completely randomly.
Pair Corralation between Capitol Health and Health
Assuming the 90 days trading horizon Capitol Health is expected to generate 2.53 times more return on investment than Health. However, Capitol Health is 2.53 times more volatile than Health and Plant. It trades about 0.04 of its potential returns per unit of risk. Health and Plant is currently generating about -0.06 per unit of risk. If you would invest 25.00 in Capitol Health on August 25, 2024 and sell it today you would earn a total of 11.00 from holding Capitol Health or generate 44.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitol Health vs. Health and Plant
Performance |
| Timeline |
| Capitol Health |
| Health and Plant |
Capitol Health and Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitol Health and Health
The main advantage of trading using opposite Capitol Health and Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Health position performs unexpectedly, 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 Health will offset losses from the drop in Health's long position.| Capitol Health vs. Aneka Tambang Tbk | Capitol Health vs. BHP Group Limited | Capitol Health vs. Rio Tinto | Capitol Health vs. Macquarie Group Ltd |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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