Correlation Between DRI Healthcare and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both DRI Healthcare and Gildan Activewear 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 DRI Healthcare and Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRI Healthcare Trust and Gildan Activewear, you can compare the effects of market volatilities on DRI Healthcare and Gildan Activewear 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 DRI Healthcare with a short position of Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRI Healthcare and Gildan Activewear.
Diversification Opportunities for DRI Healthcare and Gildan Activewear
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DRI and Gildan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding DRI Healthcare Trust and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and DRI Healthcare 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 DRI Healthcare Trust are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of DRI Healthcare i.e., DRI Healthcare and Gildan Activewear go up and down completely randomly.
Pair Corralation between DRI Healthcare and Gildan Activewear
Assuming the 90 days trading horizon DRI Healthcare Trust is expected to under-perform the Gildan Activewear. In addition to that, DRI Healthcare is 3.07 times more volatile than Gildan Activewear. It trades about -0.24 of its total potential returns per unit of risk. Gildan Activewear is currently generating about 0.09 per unit of volatility. If you would invest 6,754 in Gildan Activewear on September 12, 2024 and sell it today you would earn a total of 87.00 from holding Gildan Activewear or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DRI Healthcare Trust vs. Gildan Activewear
Performance |
| Timeline |
| DRI Healthcare Trust |
| Gildan Activewear |
DRI Healthcare and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRI Healthcare and Gildan Activewear
The main advantage of trading using opposite DRI Healthcare and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRI Healthcare position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| DRI Healthcare vs. Premium Income | DRI Healthcare vs. E L Financial Corp | DRI Healthcare vs. Fairfax Financial Holdings | DRI Healthcare vs. Fairfax Fin Hld |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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