Correlation Between CAP LEASE and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and Advanced Medical 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 CAP LEASE and Advanced Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Advanced Medical Solutions, you can compare the effects of market volatilities on CAP LEASE and Advanced Medical 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 CAP LEASE with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Advanced Medical.
Diversification Opportunities for CAP LEASE and Advanced Medical
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CAP and Advanced is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of CAP LEASE i.e., CAP LEASE and Advanced Medical go up and down completely randomly.
Pair Corralation between CAP LEASE and Advanced Medical
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 2.4 times more return on investment than Advanced Medical. However, CAP LEASE is 2.4 times more volatile than Advanced Medical Solutions. It trades about 0.17 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about 0.02 per unit of risk. If you would invest 50.00 in CAP LEASE AVIATION on November 28, 2024 and sell it today you would earn a total of 9.00 from holding CAP LEASE AVIATION or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Advanced Medical Solutions
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Advanced Medical Sol |
CAP LEASE and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Advanced Medical
The main advantage of trading using opposite CAP LEASE and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| CAP LEASE vs. Arrow Electronics | CAP LEASE vs. Solstad Offshore ASA | CAP LEASE vs. Ruffer Investment | CAP LEASE vs. Kinnevik Investment AB |
| Advanced Medical vs. Flow Traders NV | Advanced Medical vs. MediaZest plc | Advanced Medical vs. Broadridge Financial Solutions | Advanced Medical vs. Live Nation Entertainment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |