Correlation Between FEMALE HEALTH and Arch Capital
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH and Arch Capital 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 Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and Arch Capital Group, you can compare the effects of market volatilities on FEMALE HEALTH and Arch Capital 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 Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Arch Capital.
Diversification Opportunities for FEMALE HEALTH and Arch Capital
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FEMALE and Arch is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group 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 Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of FEMALE HEALTH i.e., FEMALE HEALTH and Arch Capital go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and Arch Capital
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 2.22 times more return on investment than Arch Capital. However, FEMALE HEALTH is 2.22 times more volatile than Arch Capital Group. It trades about 0.02 of its potential returns per unit of risk. Arch Capital Group is currently generating about -0.02 per unit of risk. If you would invest 68.00 in FEMALE HEALTH on September 12, 2024 and sell it today you would earn a total of 0.00 from holding FEMALE HEALTH or generate 0.0% 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. Arch Capital Group
Performance |
| Timeline |
| FEMALE HEALTH |
| Arch Capital Group |
FEMALE HEALTH and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and Arch Capital
The main advantage of trading using opposite FEMALE HEALTH and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
| Arch Capital vs. United Natural Foods | Arch Capital vs. Tianjin Capital Environmental | Arch Capital vs. AUSTEVOLL SEAFOOD | Arch Capital vs. GFL ENVIRONM |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |