Correlation Between European Residential and Premier Health
Can any of the company-specific risk be diversified away by investing in both European Residential and Premier 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 European Residential and Premier Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Residential Real and Premier Health of, you can compare the effects of market volatilities on European Residential and Premier 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 European Residential with a short position of Premier Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Residential and Premier Health.
Diversification Opportunities for European Residential and Premier Health
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between European and Premier is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding European Residential Real and Premier Health of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Health and European Residential 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 European Residential Real are associated (or correlated) with Premier Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Health has no effect on the direction of European Residential i.e., European Residential and Premier Health go up and down completely randomly.
Pair Corralation between European Residential and Premier Health
Assuming the 90 days trading horizon European Residential Real is expected to generate 0.24 times more return on investment than Premier Health. However, European Residential Real is 4.21 times less risky than Premier Health. It trades about 0.23 of its potential returns per unit of risk. Premier Health of is currently generating about -0.18 per unit of risk. If you would invest 348.00 in European Residential Real on September 12, 2024 and sell it today you would earn a total of 22.00 from holding European Residential Real or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Residential Real vs. Premier Health of
Performance |
| Timeline |
| European Residential Real |
| Premier Health |
European Residential and Premier Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Residential and Premier Health
The main advantage of trading using opposite European Residential and Premier Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Residential position performs unexpectedly, Premier 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 Premier Health will offset losses from the drop in Premier Health's long position.| European Residential vs. BSR Real Estate | European Residential vs. Minto Apartment Real | European Residential vs. Nexus Real Estate | European Residential vs. Morguard North American |
| Premier Health vs. Dynacor Gold Mines | Premier Health vs. Sangoma Technologies Corp | Premier Health vs. Geodrill Limited | Premier Health vs. Biosyent |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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