Correlation Between Medical Facilities and American Shared
Can any of the company-specific risk be diversified away by investing in both Medical Facilities and American Shared 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 Medical Facilities and American Shared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Facilities and American Shared Hospital, you can compare the effects of market volatilities on Medical Facilities and American Shared 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 Medical Facilities with a short position of American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Facilities and American Shared.
Diversification Opportunities for Medical Facilities and American Shared
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Medical and American is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital and Medical Facilities 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 Medical Facilities are associated (or correlated) with American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of Medical Facilities i.e., Medical Facilities and American Shared go up and down completely randomly.
Pair Corralation between Medical Facilities and American Shared
Assuming the 90 days horizon Medical Facilities is expected to generate 1.01 times more return on investment than American Shared. However, Medical Facilities is 1.01 times more volatile than American Shared Hospital. It trades about 0.13 of its potential returns per unit of risk. American Shared Hospital is currently generating about -0.04 per unit of risk. If you would invest 1,079 in Medical Facilities on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Medical Facilities or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Facilities vs. American Shared Hospital
Performance |
| Timeline |
| Medical Facilities |
| American Shared Hospital |
Medical Facilities and American Shared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Facilities and American Shared
The main advantage of trading using opposite Medical Facilities and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Facilities position performs unexpectedly, American Shared 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 American Shared will offset losses from the drop in American Shared's long position.| Medical Facilities vs. Jack Nathan Medical | Medical Facilities vs. Fresenius SE Co | Medical Facilities vs. Ramsay Health Care | Medical Facilities vs. Pennant Group |
| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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