Correlation Between Capitol Health and Johns Lyng
Can any of the company-specific risk be diversified away by investing in both Capitol Health and Johns Lyng 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 Johns Lyng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitol Health and Johns Lyng Group, you can compare the effects of market volatilities on Capitol Health and Johns Lyng 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 Johns Lyng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Health and Johns Lyng.
Diversification Opportunities for Capitol Health and Johns Lyng
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capitol and Johns is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Health and Johns Lyng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johns Lyng Group 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 Johns Lyng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johns Lyng Group has no effect on the direction of Capitol Health i.e., Capitol Health and Johns Lyng go up and down completely randomly.
Pair Corralation between Capitol Health and Johns Lyng
Assuming the 90 days trading horizon Capitol Health is expected to generate 1.18 times more return on investment than Johns Lyng. However, Capitol Health is 1.18 times more volatile than Johns Lyng Group. It trades about 0.04 of its potential returns per unit of risk. Johns Lyng Group is currently generating about -0.01 per unit of risk. If you would invest 38.00 in Capitol Health on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Capitol Health or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitol Health vs. Johns Lyng Group
Performance |
| Timeline |
| Capitol Health |
| Johns Lyng Group |
Capitol Health and Johns Lyng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitol Health and Johns Lyng
The main advantage of trading using opposite Capitol Health and Johns Lyng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Health position performs unexpectedly, Johns Lyng 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 Johns Lyng will offset losses from the drop in Johns Lyng's long position.| Capitol Health vs. Energy Resources | Capitol Health vs. 88 Energy | Capitol Health vs. Amani Gold | Capitol Health vs. A1 Investments Resources |
| Johns Lyng vs. Patriot Battery Metals | Johns Lyng vs. Group 6 Metals | Johns Lyng vs. Ainsworth Game Technology | Johns Lyng vs. Capitol Health |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |