Correlation Between Medical Facilities and Helios Fairfax
Can any of the company-specific risk be diversified away by investing in both Medical Facilities and Helios Fairfax 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 Medical Facilities and Helios Fairfax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Facilities and Helios Fairfax Partners, you can compare the effects of market volatilities on Medical Facilities and Helios Fairfax 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 Medical Facilities with a short position of Helios Fairfax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Facilities and Helios Fairfax.
Diversification Opportunities for Medical Facilities and Helios Fairfax
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Medical and Helios is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners and Medical Facilities 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 Medical Facilities are associated (or correlated) with Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Medical Facilities i.e., Medical Facilities and Helios Fairfax go up and down completely randomly.
Pair Corralation between Medical Facilities and Helios Fairfax
Assuming the 90 days horizon Medical Facilities is expected to generate 0.39 times more return on investment than Helios Fairfax. However, Medical Facilities is 2.57 times less risky than Helios Fairfax. It trades about 0.11 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about 0.02 per unit of risk. If you would invest 747.00 in Medical Facilities on September 4, 2024 and sell it today you would earn a total of 800.00 from holding Medical Facilities or generate 107.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Facilities vs. Helios Fairfax Partners
Performance |
| Timeline |
| Medical Facilities |
| Helios Fairfax Partners |
Medical Facilities and Helios Fairfax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Facilities and Helios Fairfax
The main advantage of trading using opposite Medical Facilities and Helios Fairfax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Facilities position performs unexpectedly, Helios Fairfax 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 Helios Fairfax will offset losses from the drop in Helios Fairfax's long position.| Medical Facilities vs. Extendicare | Medical Facilities vs. Sienna Senior Living | Medical Facilities vs. Rogers Sugar | Medical Facilities vs. Chemtrade Logistics Income |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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