Correlation Between Health and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Health and AiMedia Technologies 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 and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health and Plant and AiMedia Technologies, you can compare the effects of market volatilities on Health and AiMedia Technologies 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 with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health and AiMedia Technologies.
Diversification Opportunities for Health and AiMedia Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Health and AiMedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health and Plant and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Health 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 and Plant are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Health i.e., Health and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Health and AiMedia Technologies
Assuming the 90 days trading horizon Health and Plant is expected to under-perform the AiMedia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Health and Plant is 2.05 times less risky than AiMedia Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The AiMedia Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 34.00 in AiMedia Technologies on October 13, 2024 and sell it today you would earn a total of 50.00 from holding AiMedia Technologies or generate 147.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health and Plant vs. AiMedia Technologies
Performance |
| Timeline |
| Health and Plant |
| AiMedia Technologies |
Health and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health and AiMedia Technologies
The main advantage of trading using opposite Health and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Health vs. Homeco Daily Needs | Health vs. Pinnacle Investment Management | Health vs. Land Homes Group | Health vs. Australian Unity Office |
| AiMedia Technologies vs. Regal Funds Management | AiMedia Technologies vs. Platinum Asset Management | AiMedia Technologies vs. Health and Plant | AiMedia Technologies vs. Ramsay Health Care |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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