Correlation Between HEALTHSTREAM (HL5SG) and RTL Group
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By analyzing existing cross correlation between HEALTHSTREAM and RTL Group SA, you can compare the effects of market volatilities on HEALTHSTREAM (HL5SG) and RTL 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 HEALTHSTREAM (HL5SG) with a short position of RTL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM (HL5SG) and RTL Group.
Diversification Opportunities for HEALTHSTREAM (HL5SG) and RTL Group
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HEALTHSTREAM and RTL is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and RTL Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL Group SA and HEALTHSTREAM (HL5SG) 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 RTL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL Group SA has no effect on the direction of HEALTHSTREAM (HL5SG) i.e., HEALTHSTREAM (HL5SG) and RTL Group go up and down completely randomly.
Pair Corralation between HEALTHSTREAM (HL5SG) and RTL Group
Assuming the 90 days trading horizon HEALTHSTREAM (HL5SG) is expected to generate 2.05 times less return on investment than RTL Group. In addition to that, HEALTHSTREAM (HL5SG) is 1.48 times more volatile than RTL Group SA. It trades about 0.11 of its total potential returns per unit of risk. RTL Group SA is currently generating about 0.34 per unit of volatility. If you would invest 2,645 in RTL Group SA on October 24, 2024 and sell it today you would earn a total of 165.00 from holding RTL Group SA or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
HEALTHSTREAM vs. RTL Group SA
Performance |
| Timeline |
| HEALTHSTREAM (HL5SG) |
| RTL Group SA |
HEALTHSTREAM (HL5SG) and RTL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM (HL5SG) and RTL Group
The main advantage of trading using opposite HEALTHSTREAM (HL5SG) and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM (HL5SG) position performs unexpectedly, RTL 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 RTL Group will offset losses from the drop in RTL Group's long position.The idea behind HEALTHSTREAM and RTL Group SA 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.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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