Correlation Between Transport International and Healthcare Services
Can any of the company-specific risk be diversified away by investing in both Transport International and Healthcare Services 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 Transport International and Healthcare Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and Healthcare Services Group, you can compare the effects of market volatilities on Transport International and Healthcare Services 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 Transport International with a short position of Healthcare Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Healthcare Services.
Diversification Opportunities for Transport International and Healthcare Services
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Transport and Healthcare is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and Healthcare Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Services and Transport International 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 Transport International Holdings are associated (or correlated) with Healthcare Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Services has no effect on the direction of Transport International i.e., Transport International and Healthcare Services go up and down completely randomly.
Pair Corralation between Transport International and Healthcare Services
Assuming the 90 days horizon Transport International Holdings is expected to generate 0.42 times more return on investment than Healthcare Services. However, Transport International Holdings is 2.36 times less risky than Healthcare Services. It trades about -0.13 of its potential returns per unit of risk. Healthcare Services Group is currently generating about -0.25 per unit of risk. If you would invest 95.00 in Transport International Holdings on December 6, 2024 and sell it today you would lose (2.00) from holding Transport International Holdings or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Transport International Holdin vs. Healthcare Services Group
Performance |
| Timeline |
| Transport International |
| Healthcare Services |
Transport International and Healthcare Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Healthcare Services
The main advantage of trading using opposite Transport International and Healthcare Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International position performs unexpectedly, Healthcare Services 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 Healthcare Services will offset losses from the drop in Healthcare Services' long position.| Transport International vs. Compugroup Medical SE | Transport International vs. FORTRESS BIOTECHPRFA 25 | Transport International vs. CVR Medical Corp | Transport International vs. GLG LIFE TECH |
| Healthcare Services vs. SOEDER SPORTFISKE AB | Healthcare Services vs. Citic Telecom International | Healthcare Services vs. Singapore Telecommunications Limited | Healthcare Services vs. Cellnex Telecom SA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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