Correlation Between Hospital Mater and CoStar
Can any of the company-specific risk be diversified away by investing in both Hospital Mater and CoStar 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 Hospital Mater and CoStar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hospital Mater Dei and CoStar Group, you can compare the effects of market volatilities on Hospital Mater and CoStar 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 Hospital Mater with a short position of CoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and CoStar.
Diversification Opportunities for Hospital Mater and CoStar
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hospital and CoStar is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar Group and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of Hospital Mater i.e., Hospital Mater and CoStar go up and down completely randomly.
Pair Corralation between Hospital Mater and CoStar
Assuming the 90 days trading horizon Hospital Mater Dei is expected to under-perform the CoStar. But the stock apears to be less risky and, when comparing its historical volatility, Hospital Mater Dei is 1.42 times less risky than CoStar. The stock trades about -0.21 of its potential returns per unit of risk. The CoStar Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 437.00 in CoStar Group on September 15, 2024 and sell it today you would earn a total of 15.00 from holding CoStar Group or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hospital Mater Dei vs. CoStar Group
Performance |
| Timeline |
| Hospital Mater Dei |
| CoStar Group |
Hospital Mater and CoStar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hospital Mater and CoStar
The main advantage of trading using opposite Hospital Mater and CoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hospital Mater position performs unexpectedly, CoStar 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 CoStar will offset losses from the drop in CoStar's long position.| Hospital Mater vs. Pet Center Comrcio | Hospital Mater vs. Hapvida Participaes e | Hospital Mater vs. Natura Co Holding | Hospital Mater vs. Banco BTG Pactual |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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