Correlation Between Hospital Mater and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Hospital Mater and CM Hospitalar 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 CM Hospitalar 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 CM Hospitalar SA, you can compare the effects of market volatilities on Hospital Mater and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and CM Hospitalar.
Diversification Opportunities for Hospital Mater and CM Hospitalar
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hospital and VVEO3 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Hospital Mater i.e., Hospital Mater and CM Hospitalar go up and down completely randomly.
Pair Corralation between Hospital Mater and CM Hospitalar
Assuming the 90 days trading horizon Hospital Mater Dei is expected to generate 0.61 times more return on investment than CM Hospitalar. However, Hospital Mater Dei is 1.64 times less risky than CM Hospitalar. It trades about -0.08 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.13 per unit of risk. If you would invest 1,020 in Hospital Mater Dei on September 2, 2024 and sell it today you would lose (607.00) from holding Hospital Mater Dei or give up 59.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hospital Mater Dei vs. CM Hospitalar SA
Performance |
| Timeline |
| Hospital Mater Dei |
| CM Hospitalar SA |
Hospital Mater and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hospital Mater and CM Hospitalar
The main advantage of trading using opposite Hospital Mater and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hospital Mater position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Hospital Mater vs. CVS Health | Hospital Mater vs. Healthpeak Properties | Hospital Mater vs. Verizon Communications | Hospital Mater vs. Zoom Video Communications |
| CM Hospitalar vs. Profarma Distribuidora de | CM Hospitalar vs. Fras le SA | CM Hospitalar vs. Western Digital | CM Hospitalar vs. Energisa SA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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