Correlation Between Cumberland Pharmaceuticals and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both Cumberland Pharmaceuticals and IHH 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 Cumberland Pharmaceuticals and IHH Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumberland Pharmaceuticals and IHH Healthcare Berhad, you can compare the effects of market volatilities on Cumberland Pharmaceuticals and IHH 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 Cumberland Pharmaceuticals with a short position of IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumberland Pharmaceuticals and IHH Healthcare.
Diversification Opportunities for Cumberland Pharmaceuticals and IHH Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cumberland and IHH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals and IHH Healthcare Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHH Healthcare Berhad and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals are associated (or correlated) with IHH Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHH Healthcare Berhad has no effect on the direction of Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and IHH Healthcare go up and down completely randomly.
Pair Corralation between Cumberland Pharmaceuticals and IHH Healthcare
If you would invest 114.00 in Cumberland Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of 11.00 from holding Cumberland Pharmaceuticals or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Cumberland Pharmaceuticals vs. IHH Healthcare Berhad
Performance |
| Timeline |
| Cumberland Pharmaceuticals |
| IHH Healthcare Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cumberland Pharmaceuticals and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumberland Pharmaceuticals and IHH Healthcare
The main advantage of trading using opposite Cumberland Pharmaceuticals and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumberland Pharmaceuticals position performs unexpectedly, IHH 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 IHH Healthcare will offset losses from the drop in IHH Healthcare's long position.The idea behind Cumberland Pharmaceuticals and IHH Healthcare Berhad pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| IHH Healthcare vs. Cumberland Pharmaceuticals | IHH Healthcare vs. Chiba Bank Ltd | IHH Healthcare vs. Freedom Bank of | IHH Healthcare vs. Teleflex Incorporated |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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