Correlation Between Central Asia and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both Central Asia and Spire 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 Central Asia and Spire Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and Spire Healthcare Group, you can compare the effects of market volatilities on Central Asia and Spire 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 Central Asia with a short position of Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Spire Healthcare.
Diversification Opportunities for Central Asia and Spire Healthcare
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Central and Spire is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare and Central Asia 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 Central Asia Metals are associated (or correlated) with Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Central Asia i.e., Central Asia and Spire Healthcare go up and down completely randomly.
Pair Corralation between Central Asia and Spire Healthcare
Assuming the 90 days trading horizon Central Asia Metals is expected to under-perform the Spire Healthcare. In addition to that, Central Asia is 1.45 times more volatile than Spire Healthcare Group. It trades about -0.01 of its total potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.01 per unit of volatility. If you would invest 21,581 in Spire Healthcare Group on August 30, 2024 and sell it today you would earn a total of 169.00 from holding Spire Healthcare Group or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. Spire Healthcare Group
Performance |
| Timeline |
| Central Asia Metals |
| Spire Healthcare |
Central Asia and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and Spire Healthcare
The main advantage of trading using opposite Central Asia and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia position performs unexpectedly, Spire 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| Central Asia vs. bet at home AG | Central Asia vs. Pets at Home | Central Asia vs. LBG Media PLC | Central Asia vs. Advanced Medical Solutions |
| Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Hyundai Motor | Spire Healthcare vs. Toyota Motor Corp |
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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