Correlation Between Option Care and VITA 34
Can any of the company-specific risk be diversified away by investing in both Option Care and VITA 34 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 Option Care and VITA 34 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Option Care Health and VITA 34 AG, you can compare the effects of market volatilities on Option Care and VITA 34 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 Option Care with a short position of VITA 34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Option Care and VITA 34.
Diversification Opportunities for Option Care and VITA 34
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Option and VITA is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Option Care Health and VITA 34 AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITA 34 AG and Option Care 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 Option Care Health are associated (or correlated) with VITA 34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITA 34 AG has no effect on the direction of Option Care i.e., Option Care and VITA 34 go up and down completely randomly.
Pair Corralation between Option Care and VITA 34
Assuming the 90 days trading horizon Option Care Health is expected to under-perform the VITA 34. In addition to that, Option Care is 1.9 times more volatile than VITA 34 AG. It trades about -0.09 of its total potential returns per unit of risk. VITA 34 AG is currently generating about -0.11 per unit of volatility. If you would invest 474.00 in VITA 34 AG on September 2, 2024 and sell it today you would lose (62.00) from holding VITA 34 AG or give up 13.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Option Care Health vs. VITA 34 AG
Performance |
| Timeline |
| Option Care Health |
| VITA 34 AG |
Option Care and VITA 34 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Option Care and VITA 34
The main advantage of trading using opposite Option Care and VITA 34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Option Care position performs unexpectedly, VITA 34 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 VITA 34 will offset losses from the drop in VITA 34's long position.| Option Care vs. SPORTING | Option Care vs. NTG Nordic Transport | Option Care vs. Chuangs China Investments | Option Care vs. SCIENCE IN SPORT |
| VITA 34 vs. International Consolidated Airlines | VITA 34 vs. AEGEAN AIRLINES | VITA 34 vs. Aegean Airlines SA | VITA 34 vs. MagnaChip Semiconductor Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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