Correlation Between International Consolidated and Worldwide Healthcare
Can any of the company-specific risk be diversified away by investing in both International Consolidated and Worldwide Healthcare 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 International Consolidated and Worldwide Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Worldwide Healthcare Trust, you can compare the effects of market volatilities on International Consolidated and Worldwide Healthcare 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 International Consolidated with a short position of Worldwide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Worldwide Healthcare.
Diversification Opportunities for International Consolidated and Worldwide Healthcare
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and Worldwide is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and Worldwide Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldwide Healthcare and International Consolidated 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 International Consolidated Airlines are associated (or correlated) with Worldwide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldwide Healthcare has no effect on the direction of International Consolidated i.e., International Consolidated and Worldwide Healthcare go up and down completely randomly.
Pair Corralation between International Consolidated and Worldwide Healthcare
Assuming the 90 days trading horizon International Consolidated Airlines is expected to generate 1.31 times more return on investment than Worldwide Healthcare. However, International Consolidated is 1.31 times more volatile than Worldwide Healthcare Trust. It trades about 0.63 of its potential returns per unit of risk. Worldwide Healthcare Trust is currently generating about -0.18 per unit of risk. If you would invest 23,770 in International Consolidated Airlines on September 13, 2024 and sell it today you would earn a total of 5,030 from holding International Consolidated Airlines or generate 21.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Worldwide Healthcare Trust
Performance |
| Timeline |
| International Consolidated |
| Worldwide Healthcare |
International Consolidated and Worldwide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Worldwide Healthcare
The main advantage of trading using opposite International Consolidated and Worldwide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated position performs unexpectedly, Worldwide Healthcare 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 Worldwide Healthcare will offset losses from the drop in Worldwide Healthcare's long position.| International Consolidated vs. Europa Metals | International Consolidated vs. Jacquet Metal Service | International Consolidated vs. Sovereign Metals | International Consolidated vs. Sealed Air Corp |
| Worldwide Healthcare vs. Aeorema Communications Plc | Worldwide Healthcare vs. Spirent Communications plc | Worldwide Healthcare vs. Charter Communications Cl | Worldwide Healthcare vs. Team Internet Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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