Correlation Between Oceania Healthcare and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Oceania Healthcare and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceania Healthcare and Southern Cross Media, you can compare the effects of market volatilities on Oceania Healthcare and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceania Healthcare and Southern Cross.
Diversification Opportunities for Oceania Healthcare and Southern Cross
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oceania and Southern is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Oceania Healthcare and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of Oceania Healthcare i.e., Oceania Healthcare and Southern Cross go up and down completely randomly.
Pair Corralation between Oceania Healthcare and Southern Cross
Assuming the 90 days trading horizon Oceania Healthcare is expected to generate 1.67 times more return on investment than Southern Cross. However, Oceania Healthcare is 1.67 times more volatile than Southern Cross Media. It trades about 0.37 of its potential returns per unit of risk. Southern Cross Media is currently generating about 0.11 per unit of risk. If you would invest 60.00 in Oceania Healthcare on November 6, 2024 and sell it today you would earn a total of 13.00 from holding Oceania Healthcare or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oceania Healthcare vs. Southern Cross Media
Performance |
| Timeline |
| Oceania Healthcare |
| Southern Cross Media |
Oceania Healthcare and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceania Healthcare and Southern Cross
The main advantage of trading using opposite Oceania Healthcare and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceania Healthcare position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| Oceania Healthcare vs. Hudson Investment Group | Oceania Healthcare vs. Microequities Asset Management | Oceania Healthcare vs. Sandon Capital Investments | Oceania Healthcare vs. Djerriwarrh Investments |
| Southern Cross vs. Qbe Insurance Group | Southern Cross vs. Cleanaway Waste Management | Southern Cross vs. Credit Clear | Southern Cross vs. Liberty Financial Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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