Correlation Between Alphabet and Raffles Medical
Can any of the company-specific risk be diversified away by investing in both Alphabet and Raffles Medical 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 Alphabet and Raffles Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Raffles Medical Group, you can compare the effects of market volatilities on Alphabet and Raffles Medical 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 Alphabet with a short position of Raffles Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Raffles Medical.
Diversification Opportunities for Alphabet and Raffles Medical
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alphabet and Raffles is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Raffles Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raffles Medical Group and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Raffles Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raffles Medical Group has no effect on the direction of Alphabet i.e., Alphabet and Raffles Medical go up and down completely randomly.
Pair Corralation between Alphabet and Raffles Medical
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.59 times more return on investment than Raffles Medical. However, Alphabet is 1.59 times more volatile than Raffles Medical Group. It trades about 0.08 of its potential returns per unit of risk. Raffles Medical Group is currently generating about -0.07 per unit of risk. If you would invest 13,670 in Alphabet Inc Class C on September 12, 2024 and sell it today you would earn a total of 4,983 from holding Alphabet Inc Class C or generate 36.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 21.37% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Raffles Medical Group
Performance |
| Timeline |
| Alphabet Class C |
| Raffles Medical Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alphabet and Raffles Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Raffles Medical
The main advantage of trading using opposite Alphabet and Raffles Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Raffles Medical 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 Raffles Medical will offset losses from the drop in Raffles Medical's long position.The idea behind Alphabet Inc Class C and Raffles Medical Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Raffles Medical vs. Pennant Group | Raffles Medical vs. Surgery Partners | Raffles Medical vs. The Ensign Group | Raffles Medical vs. Encompass Health Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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