Correlation Between Laboratory and Regional Health
Can any of the company-specific risk be diversified away by investing in both Laboratory and Regional 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 Laboratory and Regional Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laboratory of and Regional Health Properties, you can compare the effects of market volatilities on Laboratory and Regional 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 Laboratory with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laboratory and Regional Health.
Diversification Opportunities for Laboratory and Regional Health
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Laboratory and Regional is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop 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 Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Laboratory i.e., Laboratory and Regional Health go up and down completely randomly.
Pair Corralation between Laboratory and Regional Health
Allowing for the 90-day total investment horizon Laboratory of is expected to generate 0.09 times more return on investment than Regional Health. However, Laboratory of is 11.24 times less risky than Regional Health. It trades about -0.01 of its potential returns per unit of risk. Regional Health Properties is currently generating about -0.05 per unit of risk. If you would invest 25,154 in Laboratory of on December 1, 2024 and sell it today you would lose (50.00) from holding Laboratory of or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 23.81% |
| Values | Daily Returns |
Laboratory of vs. Regional Health Properties
Performance |
| Timeline |
| Laboratory |
| Regional Health Prop |
Risk-Adjusted Performance
OK
Weak | Strong |
Laboratory and Regional Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laboratory and Regional Health
The main advantage of trading using opposite Laboratory and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory position performs unexpectedly, Regional 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 Regional Health will offset losses from the drop in Regional Health's long position.| Laboratory vs. Quest Diagnostics Incorporated | Laboratory vs. Waters | Laboratory vs. Universal Health Services | Laboratory vs. Humana Inc |
| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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