Correlation Between LIFE CAPITAL and Hospital Nossa
Can any of the company-specific risk be diversified away by investing in both LIFE CAPITAL and Hospital Nossa 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 CAPITAL and Hospital Nossa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE CAPITAL PARTNERS and Hospital Nossa Senhora, you can compare the effects of market volatilities on LIFE CAPITAL and Hospital Nossa 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 CAPITAL with a short position of Hospital Nossa. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE CAPITAL and Hospital Nossa.
Diversification Opportunities for LIFE CAPITAL and Hospital Nossa
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LIFE and Hospital is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding LIFE CAPITAL PARTNERS and Hospital Nossa Senhora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Nossa Senhora and LIFE CAPITAL 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 CAPITAL PARTNERS are associated (or correlated) with Hospital Nossa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Nossa Senhora has no effect on the direction of LIFE CAPITAL i.e., LIFE CAPITAL and Hospital Nossa go up and down completely randomly.
Pair Corralation between LIFE CAPITAL and Hospital Nossa
Assuming the 90 days trading horizon LIFE CAPITAL PARTNERS is expected to under-perform the Hospital Nossa. In addition to that, LIFE CAPITAL is 2.3 times more volatile than Hospital Nossa Senhora. It trades about -0.19 of its total potential returns per unit of risk. Hospital Nossa Senhora is currently generating about -0.2 per unit of volatility. If you would invest 16,580 in Hospital Nossa Senhora on September 19, 2024 and sell it today you would lose (1,100) from holding Hospital Nossa Senhora or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.56% |
| Values | Daily Returns |
LIFE CAPITAL PARTNERS vs. Hospital Nossa Senhora
Performance |
| Timeline |
| LIFE CAPITAL PARTNERS |
| Hospital Nossa Senhora |
LIFE CAPITAL and Hospital Nossa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFE CAPITAL and Hospital Nossa
The main advantage of trading using opposite LIFE CAPITAL and Hospital Nossa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE CAPITAL position performs unexpectedly, Hospital Nossa 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 Hospital Nossa will offset losses from the drop in Hospital Nossa's long position.| LIFE CAPITAL vs. BTG Pactual Logstica | LIFE CAPITAL vs. Plano Plano Desenvolvimento | LIFE CAPITAL vs. Companhia Habitasul de | LIFE CAPITAL vs. FDO INV IMOB |
| Hospital Nossa vs. Maxi Renda Fundo | Hospital Nossa vs. Scp Fundo De | Hospital Nossa vs. EXES FUNDO DE | Hospital Nossa vs. TRX Renda Fundo |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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