Correlation Between Flagship Investments and Oceania Healthcare
Can any of the company-specific risk be diversified away by investing in both Flagship Investments and Oceania Healthcare 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 Flagship Investments and Oceania Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Oceania Healthcare, you can compare the effects of market volatilities on Flagship Investments and Oceania Healthcare 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 Flagship Investments with a short position of Oceania Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Oceania Healthcare.
Diversification Opportunities for Flagship Investments and Oceania Healthcare
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flagship and Oceania is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Oceania Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceania Healthcare and Flagship Investments 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 Flagship Investments are associated (or correlated) with Oceania Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceania Healthcare has no effect on the direction of Flagship Investments i.e., Flagship Investments and Oceania Healthcare go up and down completely randomly.
Pair Corralation between Flagship Investments and Oceania Healthcare
Assuming the 90 days trading horizon Flagship Investments is expected to generate 0.43 times more return on investment than Oceania Healthcare. However, Flagship Investments is 2.31 times less risky than Oceania Healthcare. It trades about -0.08 of its potential returns per unit of risk. Oceania Healthcare is currently generating about -0.09 per unit of risk. If you would invest 205.00 in Flagship Investments on January 16, 2025 and sell it today you would lose (16.00) from holding Flagship Investments or give up 7.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. Oceania Healthcare
Performance |
| Timeline |
| Flagship Investments |
| Oceania Healthcare |
Flagship Investments and Oceania Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Oceania Healthcare
The main advantage of trading using opposite Flagship Investments and Oceania Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, Oceania Healthcare 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 Oceania Healthcare will offset losses from the drop in Oceania Healthcare's long position.| Flagship Investments vs. Tombador Iron | Flagship Investments vs. Maggie Beer Holdings | Flagship Investments vs. Aeris Environmental | Flagship Investments vs. Southern Cross Media |
| Oceania Healthcare vs. Dexus Convenience Retail | Oceania Healthcare vs. Australian United Investment | Oceania Healthcare vs. Charter Hall Retail | Oceania Healthcare vs. Microequities Asset Management |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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