Correlation Between Healthlead Public and II Group
Can any of the company-specific risk be diversified away by investing in both Healthlead Public and II Group 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 Healthlead Public and II Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthlead Public and II Group Public, you can compare the effects of market volatilities on Healthlead Public and II Group 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 Healthlead Public with a short position of II Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthlead Public and II Group.
Diversification Opportunities for Healthlead Public and II Group
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Healthlead and IIG is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Healthlead Public and II Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on II Group Public and Healthlead Public 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 Healthlead Public are associated (or correlated) with II Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of II Group Public has no effect on the direction of Healthlead Public i.e., Healthlead Public and II Group go up and down completely randomly.
Pair Corralation between Healthlead Public and II Group
Assuming the 90 days horizon Healthlead Public is expected to under-perform the II Group. But the stock apears to be less risky and, when comparing its historical volatility, Healthlead Public is 20.96 times less risky than II Group. The stock trades about -0.08 of its potential returns per unit of risk. The II Group Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,625 in II Group Public on August 28, 2024 and sell it today you would lose (3,115) from holding II Group Public or give up 85.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthlead Public vs. II Group Public
Performance |
| Timeline |
| Healthlead Public |
| II Group Public |
Healthlead Public and II Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthlead Public and II Group
The main advantage of trading using opposite Healthlead Public and II Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthlead Public position performs unexpectedly, II Group 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 II Group will offset losses from the drop in II Group's long position.| Healthlead Public vs. II Group Public | Healthlead Public vs. Dohome Public | Healthlead Public vs. Humanica Public | Healthlead Public vs. Jay Mart Public |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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