Correlation Between Health and Credit Corp
Can any of the company-specific risk be diversified away by investing in both Health and Credit Corp 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 Credit Corp 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 Credit Corp Group, you can compare the effects of market volatilities on Health and Credit Corp 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 Credit Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health and Credit Corp.
Diversification Opportunities for Health and Credit Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Health and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health and Plant and Credit Corp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Corp Group 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 Credit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Corp Group has no effect on the direction of Health i.e., Health and Credit Corp go up and down completely randomly.
Pair Corralation between Health and Credit Corp
Assuming the 90 days trading horizon Health and Plant is expected to under-perform the Credit Corp. But the stock apears to be less risky and, when comparing its historical volatility, Health and Plant is 1.33 times less risky than Credit Corp. The stock trades about -0.05 of its potential returns per unit of risk. The Credit Corp Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,756 in Credit Corp Group on September 16, 2024 and sell it today you would lose (128.00) from holding Credit Corp Group or give up 7.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health and Plant vs. Credit Corp Group
Performance |
| Timeline |
| Health and Plant |
| Credit Corp Group |
Health and Credit Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health and Credit Corp
The main advantage of trading using opposite Health and Credit Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health position performs unexpectedly, Credit Corp 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 Credit Corp will offset losses from the drop in Credit Corp's long position.| Health vs. Aneka Tambang Tbk | Health vs. Macquarie Group | Health vs. Macquarie Group Ltd | Health vs. Challenger |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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