Correlation Between Medibank Private and Global Health
Can any of the company-specific risk be diversified away by investing in both Medibank Private and Global Health 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 Medibank Private and Global Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medibank Private and Global Health, you can compare the effects of market volatilities on Medibank Private and Global Health 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 Medibank Private with a short position of Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medibank Private and Global Health.
Diversification Opportunities for Medibank Private and Global Health
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medibank and Global is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Medibank Private and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health and Medibank Private 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 Medibank Private are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Medibank Private i.e., Medibank Private and Global Health go up and down completely randomly.
Pair Corralation between Medibank Private and Global Health
Assuming the 90 days trading horizon Medibank Private is expected to generate 1.08 times less return on investment than Global Health. But when comparing it to its historical volatility, Medibank Private is 4.32 times less risky than Global Health. It trades about 0.06 of its potential returns per unit of risk. Global Health is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Global Health on November 7, 2024 and sell it today you would lose (4.00) from holding Global Health or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medibank Private vs. Global Health
Performance |
| Timeline |
| Medibank Private |
| Global Health |
Medibank Private and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medibank Private and Global Health
The main advantage of trading using opposite Medibank Private and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medibank Private position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.| Medibank Private vs. Centrex Metals | Medibank Private vs. Dalaroo Metals | Medibank Private vs. 29Metals | Medibank Private vs. Aurelia Metals |
| Global Health vs. Regis Healthcare | Global Health vs. Ainsworth Game Technology | Global Health vs. Centaurus Metals | Global Health vs. MetalsGrove Mining |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |