Correlation Between CSL and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both CSL and ONWARD 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 CSL and ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL Limited and ONWARD MEDICAL BV, you can compare the effects of market volatilities on CSL and ONWARD 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 CSL with a short position of ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and ONWARD MEDICAL.
Diversification Opportunities for CSL and ONWARD MEDICAL
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSL and ONWARD is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV and CSL 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 CSL Limited are associated (or correlated) with ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of CSL i.e., CSL and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between CSL and ONWARD MEDICAL
Assuming the 90 days horizon CSL Limited is expected to under-perform the ONWARD MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, CSL Limited is 5.41 times less risky than ONWARD MEDICAL. The stock trades about -0.13 of its potential returns per unit of risk. The ONWARD MEDICAL BV is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 496.00 in ONWARD MEDICAL BV on November 4, 2024 and sell it today you would earn a total of 168.00 from holding ONWARD MEDICAL BV or generate 33.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSL Limited vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| CSL Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ONWARD MEDICAL BV |
CSL and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and ONWARD MEDICAL
The main advantage of trading using opposite CSL and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, ONWARD 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| CSL vs. BRAEMAR HOTELS RES | CSL vs. MELIA HOTELS | CSL vs. COVIVIO HOTELS INH | CSL vs. Playa Hotels Resorts |
| ONWARD MEDICAL vs. Verizon Communications | ONWARD MEDICAL vs. CRISPR Therapeutics AG | ONWARD MEDICAL vs. InterContinental Hotels Group | ONWARD MEDICAL vs. Wyndham Hotels Resorts |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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