Correlation Between Ming Le and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Ming Le and SHIP HEALTHCARE 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 Ming Le and SHIP HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Ming Le and SHIP HEALTHCARE 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 Ming Le with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and SHIP HEALTHCARE.
Diversification Opportunities for Ming Le and SHIP HEALTHCARE
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ming and SHIP is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and Ming Le 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 Ming Le Sports are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Ming Le i.e., Ming Le and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Ming Le and SHIP HEALTHCARE
Assuming the 90 days trading horizon Ming Le is expected to generate 1.47 times less return on investment than SHIP HEALTHCARE. But when comparing it to its historical volatility, Ming Le Sports is 1.43 times less risky than SHIP HEALTHCARE. It trades about 0.03 of its potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,098 in SHIP HEALTHCARE HLDGINC on September 1, 2024 and sell it today you would earn a total of 232.00 from holding SHIP HEALTHCARE HLDGINC or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ming Le Sports vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Ming Le Sports |
| SHIP HEALTHCARE HLDGINC |
Ming Le and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and SHIP HEALTHCARE
The main advantage of trading using opposite Ming Le and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le position performs unexpectedly, SHIP HEALTHCARE 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.The idea behind Ming Le Sports and SHIP HEALTHCARE HLDGINC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SHIP HEALTHCARE vs. EVS Broadcast Equipment | SHIP HEALTHCARE vs. PARKEN Sport Entertainment | SHIP HEALTHCARE vs. PT Global Mediacom | SHIP HEALTHCARE vs. NTG Nordic Transport |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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