Correlation Between Global Health and People Infrastructure
Can any of the company-specific risk be diversified away by investing in both Global Health and People Infrastructure 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 People Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and People Infrastructure, you can compare the effects of market volatilities on Global Health and People Infrastructure 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 People Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and People Infrastructure.
Diversification Opportunities for Global Health and People Infrastructure
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and People is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and People Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Infrastructure 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 People Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Infrastructure has no effect on the direction of Global Health i.e., Global Health and People Infrastructure go up and down completely randomly.
Pair Corralation between Global Health and People Infrastructure
Assuming the 90 days trading horizon Global Health is expected to under-perform the People Infrastructure. But the stock apears to be less risky and, when comparing its historical volatility, Global Health is 1.69 times less risky than People Infrastructure. The stock trades about -0.11 of its potential returns per unit of risk. The People Infrastructure is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 82.00 in People Infrastructure on August 30, 2024 and sell it today you would lose (1.00) from holding People Infrastructure or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Health vs. People Infrastructure
Performance |
| Timeline |
| Global Health |
| People Infrastructure |
Global Health and People Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and People Infrastructure
The main advantage of trading using opposite Global Health and People Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, People Infrastructure 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 People Infrastructure will offset losses from the drop in People Infrastructure's long position.| Global Health vs. Regis Healthcare | Global Health vs. Sandon Capital Investments | Global Health vs. Janison Education Group | Global Health vs. Epsilon Healthcare |
| People Infrastructure vs. Black Rock Mining | People Infrastructure vs. Prime Financial Group | People Infrastructure vs. Qbe Insurance Group | People Infrastructure vs. Perpetual Credit Income |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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