Correlation Between Old Mutual and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Old Mutual and Advanced Medical 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 Old Mutual and Advanced Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Mutual and Advanced Medical Solutions, you can compare the effects of market volatilities on Old Mutual and Advanced Medical 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 Old Mutual with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Mutual and Advanced Medical.
Diversification Opportunities for Old Mutual and Advanced Medical
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Advanced is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Old Mutual and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol and Old Mutual 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 Old Mutual are associated (or correlated) with Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Old Mutual i.e., Old Mutual and Advanced Medical go up and down completely randomly.
Pair Corralation between Old Mutual and Advanced Medical
Assuming the 90 days trading horizon Old Mutual is expected to generate 5.91 times more return on investment than Advanced Medical. However, Old Mutual is 5.91 times more volatile than Advanced Medical Solutions. It trades about 0.13 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about -0.04 per unit of risk. If you would invest 2,067 in Old Mutual on September 3, 2024 and sell it today you would earn a total of 3,453 from holding Old Mutual or generate 167.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Mutual vs. Advanced Medical Solutions
Performance |
| Timeline |
| Old Mutual |
| Advanced Medical Sol |
Old Mutual and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Mutual and Advanced Medical
The main advantage of trading using opposite Old Mutual and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Mutual position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| Old Mutual vs. Advanced Medical Solutions | Old Mutual vs. Empire Metals Limited | Old Mutual vs. CompuGroup Medical AG | Old Mutual vs. CAP LEASE AVIATION |
| Advanced Medical vs. National Beverage Corp | Advanced Medical vs. Cincinnati Financial Corp | Advanced Medical vs. Qurate Retail Series | Advanced Medical vs. St Galler Kantonalbank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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