Correlation Between FEMALE HEALTH and THORNEY TECHS
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH and THORNEY TECHS 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 THORNEY TECHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and THORNEY TECHS LTD, you can compare the effects of market volatilities on FEMALE HEALTH and THORNEY TECHS 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 THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and THORNEY TECHS.
Diversification Opportunities for FEMALE HEALTH and THORNEY TECHS
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between FEMALE and THORNEY is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD 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 THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of FEMALE HEALTH i.e., FEMALE HEALTH and THORNEY TECHS go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and THORNEY TECHS
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the THORNEY TECHS. In addition to that, FEMALE HEALTH is 1.18 times more volatile than THORNEY TECHS LTD. It trades about -0.04 of its total potential returns per unit of risk. THORNEY TECHS LTD is currently generating about -0.01 per unit of volatility. If you would invest 20.00 in THORNEY TECHS LTD on September 2, 2024 and sell it today you would lose (12.25) from holding THORNEY TECHS LTD or give up 61.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. THORNEY TECHS LTD
Performance |
| Timeline |
| FEMALE HEALTH |
| THORNEY TECHS LTD |
FEMALE HEALTH and THORNEY TECHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and THORNEY TECHS
The main advantage of trading using opposite FEMALE HEALTH and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS's long position.| FEMALE HEALTH vs. SIVERS SEMICONDUCTORS AB | FEMALE HEALTH vs. Darden Restaurants | FEMALE HEALTH vs. Reliance Steel Aluminum | FEMALE HEALTH vs. Q2M Managementberatung AG |
| THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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