Correlation Between Virtual Medical and Galexxy Holdings
Can any of the company-specific risk be diversified away by investing in both Virtual Medical and Galexxy 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 Virtual Medical and Galexxy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtual Medical International and Galexxy Holdings, you can compare the effects of market volatilities on Virtual Medical and Galexxy 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 Virtual Medical with a short position of Galexxy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtual Medical and Galexxy Holdings.
Diversification Opportunities for Virtual Medical and Galexxy Holdings
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtual and Galexxy is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Virtual Medical International and Galexxy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galexxy Holdings and Virtual Medical 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 Virtual Medical International are associated (or correlated) with Galexxy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galexxy Holdings has no effect on the direction of Virtual Medical i.e., Virtual Medical and Galexxy Holdings go up and down completely randomly.
Pair Corralation between Virtual Medical and Galexxy Holdings
Given the investment horizon of 90 days Virtual Medical International is expected to generate 1.83 times more return on investment than Galexxy Holdings. However, Virtual Medical is 1.83 times more volatile than Galexxy Holdings. It trades about 0.22 of its potential returns per unit of risk. Galexxy Holdings is currently generating about -0.25 per unit of risk. If you would invest 0.01 in Virtual Medical International on August 28, 2024 and sell it today you would earn a total of 0.01 from holding Virtual Medical International or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtual Medical International vs. Galexxy Holdings
Performance |
| Timeline |
| Virtual Medical Inte |
| Galexxy Holdings |
Virtual Medical and Galexxy Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtual Medical and Galexxy Holdings
The main advantage of trading using opposite Virtual Medical and Galexxy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtual Medical position performs unexpectedly, Galexxy 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 Galexxy Holdings will offset losses from the drop in Galexxy Holdings' long position.| Virtual Medical vs. Galexxy Holdings | Virtual Medical vs. GelStat Corp | Virtual Medical vs. Link Reservations | Virtual Medical vs. Anything Tech Media |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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