Correlation Between Challenger and Health
Can any of the company-specific risk be diversified away by investing in both Challenger 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 Challenger and Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Challenger and Health and Plant, you can compare the effects of market volatilities on Challenger 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 Challenger with a short position of Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Challenger and Health.
Diversification Opportunities for Challenger and Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Challenger and Health is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Challenger 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 Challenger 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 Challenger 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 Challenger i.e., Challenger and Health go up and down completely randomly.
Pair Corralation between Challenger and Health
If you would invest 598.00 in Challenger on October 20, 2024 and sell it today you would earn a total of 15.00 from holding Challenger or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Challenger vs. Health and Plant
Performance |
| Timeline |
| Challenger |
| Health and Plant |
Challenger and Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Challenger and Health
The main advantage of trading using opposite Challenger and Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Challenger 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.| Challenger vs. Hammer Metals | Challenger vs. ACDC Metals | Challenger vs. Centaurus Metals | Challenger vs. Centrex Metals |
| Health vs. My Foodie Box | Health vs. MFF Capital Investments | Health vs. Auctus Alternative Investments | Health vs. Pinnacle Investment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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