Correlation Between Umicore SA and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both Umicore SA and FEMALE 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 Umicore SA and FEMALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Umicore SA and FEMALE HEALTH, you can compare the effects of market volatilities on Umicore SA and FEMALE 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 Umicore SA with a short position of FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Umicore SA and FEMALE HEALTH.
Diversification Opportunities for Umicore SA and FEMALE HEALTH
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Umicore and FEMALE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Umicore SA and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH and Umicore SA 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 Umicore SA are associated (or correlated) with FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of Umicore SA i.e., Umicore SA and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between Umicore SA and FEMALE HEALTH
Assuming the 90 days trading horizon Umicore SA is expected to under-perform the FEMALE HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Umicore SA is 1.78 times less risky than FEMALE HEALTH. The stock trades about -0.19 of its potential returns per unit of risk. The FEMALE HEALTH is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 149.00 in FEMALE HEALTH on September 3, 2024 and sell it today you would lose (81.00) from holding FEMALE HEALTH or give up 54.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Umicore SA vs. FEMALE HEALTH
Performance |
| Timeline |
| Umicore SA |
| FEMALE HEALTH |
Umicore SA and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Umicore SA and FEMALE HEALTH
The main advantage of trading using opposite Umicore SA and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Umicore SA position performs unexpectedly, FEMALE 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| Umicore SA vs. FEMALE HEALTH | Umicore SA vs. Diamondrock Hospitality Co | Umicore SA vs. NorAm Drilling AS | Umicore SA vs. EPSILON HEALTHCARE LTD |
| FEMALE HEALTH vs. Universal Display | FEMALE HEALTH vs. SALESFORCE INC CDR | FEMALE HEALTH vs. Entravision Communications | FEMALE HEALTH vs. ULTRA CLEAN HLDGS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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