Correlation Between II Group and Healthlead Public
Can any of the company-specific risk be diversified away by investing in both II Group and Healthlead Public 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 II Group and Healthlead Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between II Group Public and Healthlead Public, you can compare the effects of market volatilities on II Group and Healthlead Public 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 II Group with a short position of Healthlead Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of II Group and Healthlead Public.
Diversification Opportunities for II Group and Healthlead Public
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IIG and Healthlead is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding II Group Public and Healthlead Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthlead Public and II Group 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 II Group Public are associated (or correlated) with Healthlead Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthlead Public has no effect on the direction of II Group i.e., II Group and Healthlead Public go up and down completely randomly.
Pair Corralation between II Group and Healthlead Public
Assuming the 90 days trading horizon II Group Public is expected to under-perform the Healthlead Public. In addition to that, II Group is 2.05 times more volatile than Healthlead Public. It trades about -0.33 of its total potential returns per unit of risk. Healthlead Public is currently generating about 0.36 per unit of volatility. If you would invest 805.00 in Healthlead Public on August 27, 2024 and sell it today you would earn a total of 75.00 from holding Healthlead Public or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
II Group Public vs. Healthlead Public
Performance |
| Timeline |
| II Group Public |
| Healthlead Public |
II Group and Healthlead Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with II Group and Healthlead Public
The main advantage of trading using opposite II Group and Healthlead Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if II Group position performs unexpectedly, Healthlead Public 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 Healthlead Public will offset losses from the drop in Healthlead Public's long position.| II Group vs. Com7 PCL | II Group vs. Beryl 8 Plus | II Group vs. Hana Microelectronics Public | II Group vs. Jay Mart Public |
| Healthlead Public vs. II Group Public | Healthlead Public vs. Dohome Public | Healthlead Public vs. Humanica Public | Healthlead Public vs. Jay Mart Public |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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