Correlation Between Inter Pharma and Intermedical Care
Can any of the company-specific risk be diversified away by investing in both Inter Pharma and Intermedical Care 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 Inter Pharma and Intermedical Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Pharma Public and Intermedical Care and, you can compare the effects of market volatilities on Inter Pharma and Intermedical Care 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 Inter Pharma with a short position of Intermedical Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Pharma and Intermedical Care.
Diversification Opportunities for Inter Pharma and Intermedical Care
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inter and Intermedical is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Inter Pharma Public and Intermedical Care and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermedical Care and Inter Pharma 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 Inter Pharma Public are associated (or correlated) with Intermedical Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermedical Care has no effect on the direction of Inter Pharma i.e., Inter Pharma and Intermedical Care go up and down completely randomly.
Pair Corralation between Inter Pharma and Intermedical Care
Assuming the 90 days horizon Inter Pharma Public is expected to generate 1.0 times more return on investment than Intermedical Care. However, Inter Pharma is 1.0 times more volatile than Intermedical Care and. It trades about 0.04 of its potential returns per unit of risk. Intermedical Care and is currently generating about 0.04 per unit of risk. If you would invest 861.00 in Inter Pharma Public on August 30, 2024 and sell it today you would lose (507.00) from holding Inter Pharma Public or give up 58.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inter Pharma Public vs. Intermedical Care and
Performance |
| Timeline |
| Inter Pharma Public |
| Intermedical Care |
Inter Pharma and Intermedical Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Pharma and Intermedical Care
The main advantage of trading using opposite Inter Pharma and Intermedical Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Pharma position performs unexpectedly, Intermedical Care 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 Intermedical Care will offset losses from the drop in Intermedical Care's long position.| Inter Pharma vs. Intermedical Care and | Inter Pharma vs. DOD Biotech Public | Inter Pharma vs. Siam Global House | Inter Pharma vs. Dohome Public |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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