Correlation Between Retail Estates and UNIV HEALTH
Can any of the company-specific risk be diversified away by investing in both Retail Estates and UNIV HEALTH 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 Retail Estates and UNIV HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and UNIV HEALTH SERV B, you can compare the effects of market volatilities on Retail Estates and UNIV HEALTH 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 Retail Estates with a short position of UNIV HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and UNIV HEALTH.
Diversification Opportunities for Retail Estates and UNIV HEALTH
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Retail and UNIV is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and UNIV HEALTH SERV B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIV HEALTH SERV and Retail Estates 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 Retail Estates NV are associated (or correlated) with UNIV HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIV HEALTH SERV has no effect on the direction of Retail Estates i.e., Retail Estates and UNIV HEALTH go up and down completely randomly.
Pair Corralation between Retail Estates and UNIV HEALTH
Assuming the 90 days horizon Retail Estates NV is expected to generate 0.5 times more return on investment than UNIV HEALTH. However, Retail Estates NV is 2.0 times less risky than UNIV HEALTH. It trades about 0.31 of its potential returns per unit of risk. UNIV HEALTH SERV B is currently generating about 0.07 per unit of risk. If you would invest 5,660 in Retail Estates NV on November 28, 2024 and sell it today you would earn a total of 390.00 from holding Retail Estates NV or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Retail Estates NV vs. UNIV HEALTH SERV B
Performance |
| Timeline |
| Retail Estates NV |
| UNIV HEALTH SERV |
Retail Estates and UNIV HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and UNIV HEALTH
The main advantage of trading using opposite Retail Estates and UNIV HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, UNIV HEALTH 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 UNIV HEALTH will offset losses from the drop in UNIV HEALTH's long position.| Retail Estates vs. RESMINING UNSPADR10 | Retail Estates vs. Nomad Foods | Retail Estates vs. Thai Beverage Public | Retail Estates vs. MCEWEN MINING INC |
| UNIV HEALTH vs. MHP Hotel AG | UNIV HEALTH vs. Playa Hotels Resorts | UNIV HEALTH vs. InterContinental Hotels Group | UNIV HEALTH vs. Corporate Travel Management |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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