Correlation Between Extendicare and Chimera Investment
Can any of the company-specific risk be diversified away by investing in both Extendicare and Chimera Investment 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 Extendicare and Chimera Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extendicare and Chimera Investment, you can compare the effects of market volatilities on Extendicare and Chimera Investment 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 Extendicare with a short position of Chimera Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extendicare and Chimera Investment.
Diversification Opportunities for Extendicare and Chimera Investment
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Extendicare and Chimera is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Extendicare and Chimera Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimera Investment and Extendicare 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 Extendicare are associated (or correlated) with Chimera Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimera Investment has no effect on the direction of Extendicare i.e., Extendicare and Chimera Investment go up and down completely randomly.
Pair Corralation between Extendicare and Chimera Investment
If you would invest 500.00 in Extendicare on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Extendicare or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Extendicare vs. Chimera Investment
Performance |
| Timeline |
| Extendicare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chimera Investment |
Extendicare and Chimera Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extendicare and Chimera Investment
The main advantage of trading using opposite Extendicare and Chimera Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extendicare position performs unexpectedly, Chimera Investment 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 Chimera Investment will offset losses from the drop in Chimera Investment's long position.| Extendicare vs. Ramsay Health Care | Extendicare vs. Jack Nathan Medical | Extendicare vs. Nova Leap Health | Extendicare vs. Fresenius SE Co |
| Chimera Investment vs. Chimera Investment | Chimera Investment vs. PennyMac Mortgage Investment | Chimera Investment vs. Two Harbors Investment | Chimera Investment vs. Chimera Investment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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