Correlation Between GP Investments and Universal Health
Can any of the company-specific risk be diversified away by investing in both GP Investments and Universal Health 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 GP Investments and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and Universal Health Services,, you can compare the effects of market volatilities on GP Investments and Universal Health 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 GP Investments with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Universal Health.
Diversification Opportunities for GP Investments and Universal Health
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GPIV33 and Universal is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and Universal Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Ser and GP 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 GP Investments are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Ser has no effect on the direction of GP Investments i.e., GP Investments and Universal Health go up and down completely randomly.
Pair Corralation between GP Investments and Universal Health
Assuming the 90 days trading horizon GP Investments is expected to generate 1.66 times more return on investment than Universal Health. However, GP Investments is 1.66 times more volatile than Universal Health Services,. It trades about -0.01 of its potential returns per unit of risk. Universal Health Services, is currently generating about -0.12 per unit of risk. If you would invest 390.00 in GP Investments on November 3, 2024 and sell it today you would lose (4.00) from holding GP Investments or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GP Investments vs. Universal Health Services,
Performance |
| Timeline |
| GP Investments |
| Universal Health Ser |
GP Investments and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Universal Health
The main advantage of trading using opposite GP Investments and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| GP Investments vs. LPL Financial Holdings | GP Investments vs. Globus Medical, | GP Investments vs. KB Financial Group | GP Investments vs. Deutsche Bank Aktiengesellschaft |
| Universal Health vs. Take Two Interactive Software | Universal Health vs. G2D Investments | Universal Health vs. Check Point Software | Universal Health vs. Metalrgica Riosulense SA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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