Correlation Between Health and Scentre
Can any of the company-specific risk be diversified away by investing in both Health and Scentre 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 Scentre 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 Scentre Group, you can compare the effects of market volatilities on Health and Scentre 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 Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health and Scentre.
Diversification Opportunities for Health and Scentre
Pay attention - limited upside
The 3 months correlation between Health and Scentre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health and Plant and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre 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 Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Health i.e., Health and Scentre go up and down completely randomly.
Pair Corralation between Health and Scentre
If you would invest 4.20 in Health and Plant on September 13, 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. Scentre Group
Performance |
| Timeline |
| Health and Plant |
| Scentre Group |
Health and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health and Scentre
The main advantage of trading using opposite Health and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health position performs unexpectedly, Scentre 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 Scentre will offset losses from the drop in Scentre's long position.| Health vs. Aneka Tambang Tbk | Health vs. Macquarie Group | Health vs. Macquarie Group Ltd | Health vs. Challenger |
| Scentre vs. Health and Plant | Scentre vs. Regis Healthcare | Scentre vs. Nufarm Finance NZ | Scentre vs. Austco Healthcare |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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