Correlation Between Discover Financial and ATRYS HEALTH
Can any of the company-specific risk be diversified away by investing in both Discover Financial and ATRYS 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 Discover Financial and ATRYS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and ATRYS HEALTH SA, you can compare the effects of market volatilities on Discover Financial and ATRYS 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 Discover Financial with a short position of ATRYS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and ATRYS HEALTH.
Diversification Opportunities for Discover Financial and ATRYS HEALTH
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Discover and ATRYS is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and ATRYS HEALTH SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRYS HEALTH SA and Discover Financial 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 Discover Financial Services are associated (or correlated) with ATRYS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRYS HEALTH SA has no effect on the direction of Discover Financial i.e., Discover Financial and ATRYS HEALTH go up and down completely randomly.
Pair Corralation between Discover Financial and ATRYS HEALTH
Assuming the 90 days horizon Discover Financial Services is expected to generate 0.61 times more return on investment than ATRYS HEALTH. However, Discover Financial Services is 1.63 times less risky than ATRYS HEALTH. It trades about 0.3 of its potential returns per unit of risk. ATRYS HEALTH SA is currently generating about 0.04 per unit of risk. If you would invest 16,986 in Discover Financial Services on November 5, 2024 and sell it today you would earn a total of 2,274 from holding Discover Financial Services or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discover Financial Services vs. ATRYS HEALTH SA
Performance |
| Timeline |
| Discover Financial |
| ATRYS HEALTH SA |
Discover Financial and ATRYS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and ATRYS HEALTH
The main advantage of trading using opposite Discover Financial and ATRYS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, ATRYS 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 ATRYS HEALTH will offset losses from the drop in ATRYS HEALTH's long position.| Discover Financial vs. Visa Inc | Discover Financial vs. Mastercard | Discover Financial vs. Mastercard | Discover Financial vs. American Express |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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