Correlation Between H2O Retailing and PEPTONIC MEDICAL
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and PEPTONIC 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 H2O Retailing and PEPTONIC MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and PEPTONIC MEDICAL, you can compare the effects of market volatilities on H2O Retailing and PEPTONIC 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 H2O Retailing with a short position of PEPTONIC MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and PEPTONIC MEDICAL.
Diversification Opportunities for H2O Retailing and PEPTONIC MEDICAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between H2O and PEPTONIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and PEPTONIC MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPTONIC MEDICAL and H2O Retailing 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 H2O Retailing are associated (or correlated) with PEPTONIC MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPTONIC MEDICAL has no effect on the direction of H2O Retailing i.e., H2O Retailing and PEPTONIC MEDICAL go up and down completely randomly.
Pair Corralation between H2O Retailing and PEPTONIC MEDICAL
Assuming the 90 days horizon H2O Retailing is expected to generate 18.76 times less return on investment than PEPTONIC MEDICAL. But when comparing it to its historical volatility, H2O Retailing is 21.39 times less risky than PEPTONIC MEDICAL. It trades about 0.07 of its potential returns per unit of risk. PEPTONIC MEDICAL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.62 in PEPTONIC MEDICAL on November 6, 2024 and sell it today you would lose (0.60) from holding PEPTONIC MEDICAL or give up 96.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. PEPTONIC MEDICAL
Performance |
| Timeline |
| H2O Retailing |
| PEPTONIC MEDICAL |
H2O Retailing and PEPTONIC MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and PEPTONIC MEDICAL
The main advantage of trading using opposite H2O Retailing and PEPTONIC MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, PEPTONIC 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 PEPTONIC MEDICAL will offset losses from the drop in PEPTONIC MEDICAL's long position.| H2O Retailing vs. PREMIER FOODS | H2O Retailing vs. ADRIATIC METALS LS 013355 | H2O Retailing vs. MCEWEN MINING INC | H2O Retailing vs. SERI INDUSTRIAL EO |
| PEPTONIC MEDICAL vs. SK TELECOM TDADR | PEPTONIC MEDICAL vs. Neinor Homes SA | PEPTONIC MEDICAL vs. CENTURIA OFFICE REIT | PEPTONIC MEDICAL vs. Spirent Communications plc |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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