Correlation Between Industria and Labiana Health
Can any of the company-specific risk be diversified away by investing in both Industria and Labiana Health 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 Industria and Labiana Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industria de Diseno and Labiana Health SA, you can compare the effects of market volatilities on Industria and Labiana Health 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 Industria with a short position of Labiana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Labiana Health.
Diversification Opportunities for Industria and Labiana Health
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industria and Labiana is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Labiana Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labiana Health SA and Industria 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 Industria de Diseno are associated (or correlated) with Labiana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labiana Health SA has no effect on the direction of Industria i.e., Industria and Labiana Health go up and down completely randomly.
Pair Corralation between Industria and Labiana Health
Assuming the 90 days trading horizon Industria de Diseno is expected to generate 0.23 times more return on investment than Labiana Health. However, Industria de Diseno is 4.34 times less risky than Labiana Health. It trades about -0.19 of its potential returns per unit of risk. Labiana Health SA is currently generating about -0.17 per unit of risk. If you would invest 5,423 in Industria de Diseno on August 24, 2024 and sell it today you would lose (243.00) from holding Industria de Diseno or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industria de Diseno vs. Labiana Health SA
Performance |
| Timeline |
| Industria de Diseno |
| Labiana Health SA |
Industria and Labiana Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industria and Labiana Health
The main advantage of trading using opposite Industria and Labiana Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industria position performs unexpectedly, Labiana Health 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 Labiana Health will offset losses from the drop in Labiana Health's long position.| Industria vs. Iberdrola SA | Industria vs. Repsol | Industria vs. Banco Santander | Industria vs. ACS Actividades de |
| Labiana Health vs. Technomeca Aerospace SA | Labiana Health vs. Squirrel Media SA | Labiana Health vs. NH Hoteles | Labiana Health vs. Techo Hogar SOCIMI, |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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