Correlation Between Health and Challenger
Can any of the company-specific risk be diversified away by investing in both Health and Challenger 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 Challenger 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 Challenger, you can compare the effects of market volatilities on Health and Challenger 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 Challenger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health and Challenger.
Diversification Opportunities for Health and Challenger
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Health and Challenger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health and Plant and Challenger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Challenger 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 Challenger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Challenger has no effect on the direction of Health i.e., Health and Challenger go up and down completely randomly.
Pair Corralation between Health and Challenger
If you would invest 4.20 in Health and Plant on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Health and Plant or generate 0.0% 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. Challenger
Performance |
| Timeline |
| Health and Plant |
| Challenger |
Health and Challenger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health and Challenger
The main advantage of trading using opposite Health and Challenger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health position performs unexpectedly, Challenger 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 Challenger will offset losses from the drop in Challenger's long position.| Health vs. Aneka Tambang Tbk | Health vs. BHP Group Limited | Health vs. Commonwealth Bank of | Health vs. Commonwealth Bank of |
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.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |