Correlation Between Health Sciences and Therasense
Can any of the company-specific risk be diversified away by investing in both Health Sciences and Therasense 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 Health Sciences and Therasense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Sciences Gr and Therasense, you can compare the effects of market volatilities on Health Sciences and Therasense 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 Health Sciences with a short position of Therasense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Sciences and Therasense.
Diversification Opportunities for Health Sciences and Therasense
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Health and Therasense is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health Sciences Gr and Therasense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Therasense and Health Sciences 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 Health Sciences Gr are associated (or correlated) with Therasense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Therasense has no effect on the direction of Health Sciences i.e., Health Sciences and Therasense go up and down completely randomly.
Pair Corralation between Health Sciences and Therasense
If you would invest 0.01 in Therasense on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Therasense or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Sciences Gr vs. Therasense
Performance |
| Timeline |
| Health Sciences Gr |
| Therasense |
Health Sciences and Therasense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Sciences and Therasense
The main advantage of trading using opposite Health Sciences and Therasense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Sciences position performs unexpectedly, Therasense 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 Therasense will offset losses from the drop in Therasense's long position.| Health Sciences vs. Oxford Cannabinoid Technologies | Health Sciences vs. Pharming Group NV | Health Sciences vs. Kane Biotech | Health Sciences vs. MedMira |
| Therasense vs. GB Sciences | Therasense vs. Scisparc | Therasense vs. Creative Medical Technology | Therasense vs. Regen BioPharma |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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