Correlation Between Healthcare and HHG Capital
Can any of the company-specific risk be diversified away by investing in both Healthcare and HHG Capital 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 Healthcare and HHG Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare AI Acquisition and HHG Capital, you can compare the effects of market volatilities on Healthcare and HHG Capital 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 Healthcare with a short position of HHG Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and HHG Capital.
Diversification Opportunities for Healthcare and HHG Capital
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Healthcare and HHG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare AI Acquisition and HHG Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HHG Capital and Healthcare 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 Healthcare AI Acquisition are associated (or correlated) with HHG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HHG Capital has no effect on the direction of Healthcare i.e., Healthcare and HHG Capital go up and down completely randomly.
Pair Corralation between Healthcare and HHG Capital
If you would invest 0.57 in HHG Capital on November 5, 2024 and sell it today you would earn a total of 0.00 from holding HHG Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare AI Acquisition vs. HHG Capital
Performance |
| Timeline |
| Healthcare AI Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| HHG Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Healthcare and HHG Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare and HHG Capital
The main advantage of trading using opposite Healthcare and HHG Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare position performs unexpectedly, HHG Capital 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 HHG Capital will offset losses from the drop in HHG Capital's long position.The idea behind Healthcare AI Acquisition and HHG Capital 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.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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