Correlation Between Global Health and Credit Corp
Can any of the company-specific risk be diversified away by investing in both Global Health and Credit Corp 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 Global Health and Credit Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and Credit Corp Group, you can compare the effects of market volatilities on Global Health and Credit Corp 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 Global Health with a short position of Credit Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Credit Corp.
Diversification Opportunities for Global Health and Credit Corp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Credit is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Credit Corp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Corp Group and Global 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 Global Health are associated (or correlated) with Credit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Corp Group has no effect on the direction of Global Health i.e., Global Health and Credit Corp go up and down completely randomly.
Pair Corralation between Global Health and Credit Corp
Assuming the 90 days trading horizon Global Health is expected to generate 1.99 times more return on investment than Credit Corp. However, Global Health is 1.99 times more volatile than Credit Corp Group. It trades about 0.01 of its potential returns per unit of risk. Credit Corp Group is currently generating about 0.01 per unit of risk. If you would invest 21.00 in Global Health on September 14, 2024 and sell it today you would lose (7.00) from holding Global Health or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. Credit Corp Group
Performance |
| Timeline |
| Global Health |
| Credit Corp Group |
Global Health and Credit Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and Credit Corp
The main advantage of trading using opposite Global Health and Credit Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, Credit Corp 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 Credit Corp will offset losses from the drop in Credit Corp's long position.| Global Health vs. PVW Resources | Global Health vs. Woolworths | Global Health vs. Wesfarmers | Global Health vs. Ramsay Health Care |
| Credit Corp vs. Hawsons Iron | Credit Corp vs. Skycity Entertainment Group | Credit Corp vs. Red Hill Iron | Credit Corp vs. Bisalloy Steel Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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