Correlation Between Oceania Healthcare and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Oceania Healthcare and AiMedia Technologies 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 Oceania Healthcare and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceania Healthcare and AiMedia Technologies, you can compare the effects of market volatilities on Oceania Healthcare and AiMedia Technologies 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 Oceania Healthcare with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceania Healthcare and AiMedia Technologies.
Diversification Opportunities for Oceania Healthcare and AiMedia Technologies
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oceania and AiMedia is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oceania Healthcare and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Oceania Healthcare 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 Oceania Healthcare are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Oceania Healthcare i.e., Oceania Healthcare and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Oceania Healthcare and AiMedia Technologies
Assuming the 90 days trading horizon Oceania Healthcare is expected to generate 0.82 times more return on investment than AiMedia Technologies. However, Oceania Healthcare is 1.21 times less risky than AiMedia Technologies. It trades about 0.04 of its potential returns per unit of risk. AiMedia Technologies is currently generating about -0.02 per unit of risk. If you would invest 64.00 in Oceania Healthcare on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Oceania Healthcare or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oceania Healthcare vs. AiMedia Technologies
Performance |
| Timeline |
| Oceania Healthcare |
| AiMedia Technologies |
Oceania Healthcare and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceania Healthcare and AiMedia Technologies
The main advantage of trading using opposite Oceania Healthcare and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceania Healthcare position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Oceania Healthcare vs. Westpac Banking | Oceania Healthcare vs. iShares Global Healthcare | Oceania Healthcare vs. Australian Dairy Farms | Oceania Healthcare vs. Adriatic Metals Plc |
| AiMedia Technologies vs. iShares Global Healthcare | AiMedia Technologies vs. Australian Dairy Farms | AiMedia Technologies vs. Adriatic Metals Plc | AiMedia Technologies vs. Australian Agricultural |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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