Correlation Between FEMALE HEALTH and Airports
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH and Airports 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 FEMALE HEALTH and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and Airports of Thailand, you can compare the effects of market volatilities on FEMALE HEALTH and Airports 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 FEMALE HEALTH with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Airports.
Diversification Opportunities for FEMALE HEALTH and Airports
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FEMALE and Airports is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and FEMALE HEALTH 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 FEMALE HEALTH are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of FEMALE HEALTH i.e., FEMALE HEALTH and Airports go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and Airports
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the Airports. In addition to that, FEMALE HEALTH is 2.76 times more volatile than Airports of Thailand. It trades about -0.01 of its total potential returns per unit of risk. Airports of Thailand is currently generating about 0.03 per unit of volatility. If you would invest 165.00 in Airports of Thailand on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Airports of Thailand or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. Airports of Thailand
Performance |
| Timeline |
| FEMALE HEALTH |
| Airports of Thailand |
FEMALE HEALTH and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and Airports
The main advantage of trading using opposite FEMALE HEALTH and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| FEMALE HEALTH vs. TOTAL GABON | FEMALE HEALTH vs. Walgreens Boots Alliance | FEMALE HEALTH vs. Peak Resources Limited |
| Airports vs. MAVEN WIRELESS SWEDEN | Airports vs. FEMALE HEALTH | Airports vs. OFFICE DEPOT | Airports vs. SHIP HEALTHCARE HLDGINC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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