Correlation Between OPERA SOFTWARE and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both OPERA SOFTWARE and MEDICAL FACILITIES 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 OPERA SOFTWARE and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPERA SOFTWARE and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on OPERA SOFTWARE and MEDICAL FACILITIES 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 OPERA SOFTWARE with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPERA SOFTWARE and MEDICAL FACILITIES.
Diversification Opportunities for OPERA SOFTWARE and MEDICAL FACILITIES
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between OPERA and MEDICAL is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and OPERA SOFTWARE 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 OPERA SOFTWARE are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of OPERA SOFTWARE i.e., OPERA SOFTWARE and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between OPERA SOFTWARE and MEDICAL FACILITIES
Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 5.15 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, OPERA SOFTWARE is 1.14 times less risky than MEDICAL FACILITIES. It trades about 0.02 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 493.00 in MEDICAL FACILITIES NEW on October 29, 2024 and sell it today you would earn a total of 597.00 from holding MEDICAL FACILITIES NEW or generate 121.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPERA SOFTWARE vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| OPERA SOFTWARE |
| MEDICAL FACILITIES NEW |
OPERA SOFTWARE and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPERA SOFTWARE and MEDICAL FACILITIES
The main advantage of trading using opposite OPERA SOFTWARE and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPERA SOFTWARE position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| OPERA SOFTWARE vs. American Public Education | OPERA SOFTWARE vs. CAREER EDUCATION | OPERA SOFTWARE vs. Host Hotels Resorts | OPERA SOFTWARE vs. CHINA EDUCATION GROUP |
| MEDICAL FACILITIES vs. Semiconductor Manufacturing International | MEDICAL FACILITIES vs. Ryanair Holdings plc | MEDICAL FACILITIES vs. Hua Hong Semiconductor | MEDICAL FACILITIES vs. GALENA MINING LTD |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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