Correlation Between HEALTHSTREAM and BANK CENTRAL
Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM and BANK CENTRAL 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 HEALTHSTREAM and BANK CENTRAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHSTREAM and BANK CENTRAL ASIA, you can compare the effects of market volatilities on HEALTHSTREAM and BANK CENTRAL 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 HEALTHSTREAM with a short position of BANK CENTRAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM and BANK CENTRAL.
Diversification Opportunities for HEALTHSTREAM and BANK CENTRAL
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEALTHSTREAM and BANK is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and BANK CENTRAL ASIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK CENTRAL ASIA and HEALTHSTREAM 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 HEALTHSTREAM are associated (or correlated) with BANK CENTRAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK CENTRAL ASIA has no effect on the direction of HEALTHSTREAM i.e., HEALTHSTREAM and BANK CENTRAL go up and down completely randomly.
Pair Corralation between HEALTHSTREAM and BANK CENTRAL
Assuming the 90 days trading horizon HEALTHSTREAM is expected to generate 1.17 times less return on investment than BANK CENTRAL. In addition to that, HEALTHSTREAM is 3.35 times more volatile than BANK CENTRAL ASIA. It trades about 0.06 of its total potential returns per unit of risk. BANK CENTRAL ASIA is currently generating about 0.23 per unit of volatility. If you would invest 58.00 in BANK CENTRAL ASIA on October 30, 2024 and sell it today you would earn a total of 1.00 from holding BANK CENTRAL ASIA or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEALTHSTREAM vs. BANK CENTRAL ASIA
Performance |
| Timeline |
| HEALTHSTREAM |
| BANK CENTRAL ASIA |
HEALTHSTREAM and BANK CENTRAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM and BANK CENTRAL
The main advantage of trading using opposite HEALTHSTREAM and BANK CENTRAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM position performs unexpectedly, BANK CENTRAL 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 BANK CENTRAL will offset losses from the drop in BANK CENTRAL's long position.| HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc |
| BANK CENTRAL vs. COSTCO WHOLESALE CDR | BANK CENTRAL vs. RETAIL FOOD GROUP | BANK CENTRAL vs. CEOTRONICS | BANK CENTRAL vs. Perdoceo Education |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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