Correlation Between Pacific Health and Surge Components
Can any of the company-specific risk be diversified away by investing in both Pacific Health and Surge Components 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 Pacific Health and Surge Components into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Health Care and Surge Components, you can compare the effects of market volatilities on Pacific Health and Surge Components 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 Pacific Health with a short position of Surge Components. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Health and Surge Components.
Diversification Opportunities for Pacific Health and Surge Components
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pacific and Surge is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Health Care and Surge Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Components and Pacific Health 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 Pacific Health Care are associated (or correlated) with Surge Components. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Components has no effect on the direction of Pacific Health i.e., Pacific Health and Surge Components go up and down completely randomly.
Pair Corralation between Pacific Health and Surge Components
Given the investment horizon of 90 days Pacific Health Care is expected to under-perform the Surge Components. In addition to that, Pacific Health is 1.52 times more volatile than Surge Components. It trades about -0.05 of its total potential returns per unit of risk. Surge Components is currently generating about 0.04 per unit of volatility. If you would invest 220.00 in Surge Components on October 23, 2024 and sell it today you would earn a total of 3.00 from holding Surge Components or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Pacific Health Care vs. Surge Components
Performance |
| Timeline |
| Pacific Health Care |
| Surge Components |
Pacific Health and Surge Components Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Health and Surge Components
The main advantage of trading using opposite Pacific Health and Surge Components positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Health position performs unexpectedly, Surge Components 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 Surge Components will offset losses from the drop in Surge Components' long position.| Pacific Health vs. Pharma Bio Serv | Pacific Health vs. Greystone Logistics | Pacific Health vs. Table Trac | Pacific Health vs. Western Capital Resources |
| Surge Components vs. SCI Engineered Materials | Surge Components vs. TSS, Common Stock | Surge Components vs. Ieh Corp | Surge Components vs. Paragon Technologies |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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