Correlation Between Induction Healthcare and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Induction Healthcare and Supermarket Income 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 Induction Healthcare and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Induction Healthcare Group and Supermarket Income REIT, you can compare the effects of market volatilities on Induction Healthcare and Supermarket Income 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 Induction Healthcare with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Induction Healthcare and Supermarket Income.
Diversification Opportunities for Induction Healthcare and Supermarket Income
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Induction and Supermarket is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Induction Healthcare Group and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT and Induction Healthcare 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 Induction Healthcare Group are associated (or correlated) with Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Induction Healthcare i.e., Induction Healthcare and Supermarket Income go up and down completely randomly.
Pair Corralation between Induction Healthcare and Supermarket Income
Assuming the 90 days trading horizon Induction Healthcare Group is expected to under-perform the Supermarket Income. But the stock apears to be less risky and, when comparing its historical volatility, Induction Healthcare Group is 1.42 times less risky than Supermarket Income. The stock trades about -0.21 of its potential returns per unit of risk. The Supermarket Income REIT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,607 in Supermarket Income REIT on November 8, 2024 and sell it today you would earn a total of 183.00 from holding Supermarket Income REIT or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Induction Healthcare Group vs. Supermarket Income REIT
Performance |
| Timeline |
| Induction Healthcare |
| Supermarket Income REIT |
Induction Healthcare and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Induction Healthcare and Supermarket Income
The main advantage of trading using opposite Induction Healthcare and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Induction Healthcare position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Induction Healthcare vs. Alliance Data Systems | Induction Healthcare vs. Datagroup SE | Induction Healthcare vs. GlobalData PLC | Induction Healthcare vs. Litigation Capital Management |
| Supermarket Income vs. CVS Health Corp | Supermarket Income vs. CleanTech Lithium plc | Supermarket Income vs. Sartorius Stedim Biotech | Supermarket Income vs. Universal Health Services |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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