Correlation Between First Colombia and Active Health
Can any of the company-specific risk be diversified away by investing in both First Colombia and Active 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 First Colombia and Active Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Colombia Gold and Active Health Foods, you can compare the effects of market volatilities on First Colombia and Active 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 First Colombia with a short position of Active Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Colombia and Active Health.
Diversification Opportunities for First Colombia and Active Health
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Active is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding First Colombia Gold and Active Health Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active Health Foods and First Colombia 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 First Colombia Gold are associated (or correlated) with Active Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active Health Foods has no effect on the direction of First Colombia i.e., First Colombia and Active Health go up and down completely randomly.
Pair Corralation between First Colombia and Active Health
Given the investment horizon of 90 days First Colombia Gold is expected to generate 33.0 times more return on investment than Active Health. However, First Colombia is 33.0 times more volatile than Active Health Foods. It trades about 0.26 of its potential returns per unit of risk. Active Health Foods is currently generating about -0.13 per unit of risk. If you would invest 0.01 in First Colombia Gold on September 20, 2024 and sell it today you would lose (0.01) from holding First Colombia Gold or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Colombia Gold vs. Active Health Foods
Performance |
| Timeline |
| First Colombia Gold |
| Active Health Foods |
First Colombia and Active Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Colombia and Active Health
The main advantage of trading using opposite First Colombia and Active Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Colombia position performs unexpectedly, Active 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 Active Health will offset losses from the drop in Active Health's long position.| First Colombia vs. Green Planet Bio | First Colombia vs. Azure Holding Group | First Colombia vs. Four Leaf Acquisition | First Colombia vs. Opus Magnum Ameris |
| Active Health vs. V Group | Active Health vs. Fbec Worldwide | Active Health vs. Hiru Corporation | Active Health vs. Alkame Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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