Correlation Between Primary Health and RBG Holdings
Can any of the company-specific risk be diversified away by investing in both Primary Health and RBG Holdings 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 Primary Health and RBG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primary Health Properties and RBG Holdings PLC, you can compare the effects of market volatilities on Primary Health and RBG Holdings 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 Primary Health with a short position of RBG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primary Health and RBG Holdings.
Diversification Opportunities for Primary Health and RBG Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Primary and RBG is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Primary Health Properties and RBG Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBG Holdings PLC and Primary 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 Primary Health Properties are associated (or correlated) with RBG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBG Holdings PLC has no effect on the direction of Primary Health i.e., Primary Health and RBG Holdings go up and down completely randomly.
Pair Corralation between Primary Health and RBG Holdings
Assuming the 90 days trading horizon Primary Health Properties is expected to generate 0.1 times more return on investment than RBG Holdings. However, Primary Health Properties is 9.54 times less risky than RBG Holdings. It trades about -0.09 of its potential returns per unit of risk. RBG Holdings PLC is currently generating about -0.07 per unit of risk. If you would invest 9,907 in Primary Health Properties on September 12, 2024 and sell it today you would lose (607.00) from holding Primary Health Properties or give up 6.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Primary Health Properties vs. RBG Holdings PLC
Performance |
| Timeline |
| Primary Health Properties |
| RBG Holdings PLC |
Primary Health and RBG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primary Health and RBG Holdings
The main advantage of trading using opposite Primary Health and RBG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primary Health position performs unexpectedly, RBG Holdings 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 RBG Holdings will offset losses from the drop in RBG Holdings' long position.| Primary Health vs. Vitec Software Group | Primary Health vs. Sabien Technology Group | Primary Health vs. McEwen Mining | Primary Health vs. Endeavour Mining Corp |
| RBG Holdings vs. Odyssean Investment Trust | RBG Holdings vs. Cairo Communication SpA | RBG Holdings vs. Batm Advanced Communications | RBG Holdings vs. Beeks Trading |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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