Correlation Between China Health and Ameriguard Security
Can any of the company-specific risk be diversified away by investing in both China Health and Ameriguard Security 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 China Health and Ameriguard Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Management and Ameriguard Security Services, you can compare the effects of market volatilities on China Health and Ameriguard Security 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 China Health with a short position of Ameriguard Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Ameriguard Security.
Diversification Opportunities for China Health and Ameriguard Security
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Ameriguard is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Ameriguard Security Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriguard Security and China 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 China Health Management are associated (or correlated) with Ameriguard Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriguard Security has no effect on the direction of China Health i.e., China Health and Ameriguard Security go up and down completely randomly.
Pair Corralation between China Health and Ameriguard Security
Given the investment horizon of 90 days China Health Management is expected to generate 0.92 times more return on investment than Ameriguard Security. However, China Health Management is 1.08 times less risky than Ameriguard Security. It trades about 0.06 of its potential returns per unit of risk. Ameriguard Security Services is currently generating about -0.01 per unit of risk. If you would invest 0.34 in China Health Management on September 2, 2024 and sell it today you would earn a total of 0.06 from holding China Health Management or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Health Management vs. Ameriguard Security Services
Performance |
| Timeline |
| China Health Management |
| Ameriguard Security |
China Health and Ameriguard Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Ameriguard Security
The main advantage of trading using opposite China Health and Ameriguard Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Ameriguard Security 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 Ameriguard Security will offset losses from the drop in Ameriguard Security's long position.| China Health vs. Absolute Health and | China Health vs. Embrace Change Acquisition | China Health vs. Supurva Healthcare Group | China Health vs. TransAKT |
| Ameriguard Security vs. American Leisure Holdings | Ameriguard Security vs. Supurva Healthcare Group | Ameriguard Security vs. China Health Management | Ameriguard Security vs. Embrace Change Acquisition |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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