Correlation Between Laboratory and Cross Country
Can any of the company-specific risk be diversified away by investing in both Laboratory and Cross Country 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 Laboratory and Cross Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laboratory of and Cross Country Healthcare, you can compare the effects of market volatilities on Laboratory and Cross Country 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 Laboratory with a short position of Cross Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laboratory and Cross Country.
Diversification Opportunities for Laboratory and Cross Country
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Laboratory and Cross is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Cross Country Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Country Healthcare and Laboratory 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 Laboratory of are associated (or correlated) with Cross Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Country Healthcare has no effect on the direction of Laboratory i.e., Laboratory and Cross Country go up and down completely randomly.
Pair Corralation between Laboratory and Cross Country
Allowing for the 90-day total investment horizon Laboratory of is expected to generate 0.26 times more return on investment than Cross Country. However, Laboratory of is 3.9 times less risky than Cross Country. It trades about 0.23 of its potential returns per unit of risk. Cross Country Healthcare is currently generating about -0.06 per unit of risk. If you would invest 22,738 in Laboratory of on August 28, 2024 and sell it today you would earn a total of 1,391 from holding Laboratory of or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Laboratory of vs. Cross Country Healthcare
Performance |
| Timeline |
| Laboratory |
| Cross Country Healthcare |
Laboratory and Cross Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laboratory and Cross Country
The main advantage of trading using opposite Laboratory and Cross Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory position performs unexpectedly, Cross Country 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 Cross Country will offset losses from the drop in Cross Country's long position.| Laboratory vs. Quest Diagnostics Incorporated | Laboratory vs. Waters | Laboratory vs. Universal Health Services | Laboratory vs. Humana Inc |
| Cross Country vs. ASGN Inc | Cross Country vs. Kforce Inc | Cross Country vs. Kelly Services A | Cross Country vs. AMN Healthcare 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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