Correlation Between Grenke AG and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Grenke AG and SHIP 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 Grenke AG and SHIP HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grenke AG and SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Grenke AG and SHIP 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 Grenke AG with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grenke AG and SHIP HEALTHCARE.
Diversification Opportunities for Grenke AG and SHIP HEALTHCARE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grenke and SHIP is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grenke AG and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and Grenke AG 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 Grenke AG are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Grenke AG i.e., Grenke AG and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Grenke AG and SHIP HEALTHCARE
Assuming the 90 days trading horizon Grenke AG is expected to under-perform the SHIP HEALTHCARE. In addition to that, Grenke AG is 1.45 times more volatile than SHIP HEALTHCARE HLDGINC. It trades about -0.2 of its total potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about 0.21 per unit of volatility. If you would invest 1,260 in SHIP HEALTHCARE HLDGINC on September 13, 2024 and sell it today you would earn a total of 80.00 from holding SHIP HEALTHCARE HLDGINC or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grenke AG vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Grenke AG |
| SHIP HEALTHCARE HLDGINC |
Grenke AG and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grenke AG and SHIP HEALTHCARE
The main advantage of trading using opposite Grenke AG and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grenke AG position performs unexpectedly, SHIP 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| Grenke AG vs. Bumrungrad Hospital Public | Grenke AG vs. ATRYS HEALTH SA | Grenke AG vs. Spirent Communications plc | Grenke AG vs. EHEALTH |
| SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings | SHIP HEALTHCARE vs. SIVERS SEMICONDUCTORS AB | SHIP HEALTHCARE vs. NorAm Drilling AS |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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