Correlation Between Life Healthcare and Hosken Consolidated
Can any of the company-specific risk be diversified away by investing in both Life Healthcare and Hosken Consolidated 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 Life Healthcare and Hosken Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Healthcare and Hosken Consolidated Investments, you can compare the effects of market volatilities on Life Healthcare and Hosken Consolidated 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 Life Healthcare with a short position of Hosken Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Healthcare and Hosken Consolidated.
Diversification Opportunities for Life Healthcare and Hosken Consolidated
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Life and Hosken is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Life Healthcare and Hosken Consolidated Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hosken Consolidated and Life Healthcare 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 Life Healthcare are associated (or correlated) with Hosken Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hosken Consolidated has no effect on the direction of Life Healthcare i.e., Life Healthcare and Hosken Consolidated go up and down completely randomly.
Pair Corralation between Life Healthcare and Hosken Consolidated
Assuming the 90 days trading horizon Life Healthcare is expected to generate 1.73 times less return on investment than Hosken Consolidated. In addition to that, Life Healthcare is 1.07 times more volatile than Hosken Consolidated Investments. It trades about 0.09 of its total potential returns per unit of risk. Hosken Consolidated Investments is currently generating about 0.17 per unit of volatility. If you would invest 1,859,700 in Hosken Consolidated Investments on August 24, 2024 and sell it today you would earn a total of 92,700 from holding Hosken Consolidated Investments or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Healthcare vs. Hosken Consolidated Investment
Performance |
| Timeline |
| Life Healthcare |
| Hosken Consolidated |
Life Healthcare and Hosken Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Healthcare and Hosken Consolidated
The main advantage of trading using opposite Life Healthcare and Hosken Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Healthcare position performs unexpectedly, Hosken Consolidated 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 Hosken Consolidated will offset losses from the drop in Hosken Consolidated's long position.| Life Healthcare vs. AfroCentric Investment Corp | Life Healthcare vs. Centaur Bci Balanced | Life Healthcare vs. Growthpoint Properties | Life Healthcare vs. Bowler Metcalf |
| Hosken Consolidated vs. Kap Industrial Holdings | Hosken Consolidated vs. Deneb Investments | Hosken Consolidated vs. Brikor |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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