Correlation Between Rolls Royce and HYGEIA HC
Can any of the company-specific risk be diversified away by investing in both Rolls Royce and HYGEIA HC 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 Rolls Royce and HYGEIA HC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rolls Royce Holdings plc and HYGEIA HC HLDGS, you can compare the effects of market volatilities on Rolls Royce and HYGEIA HC 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 Rolls Royce with a short position of HYGEIA HC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rolls Royce and HYGEIA HC.
Diversification Opportunities for Rolls Royce and HYGEIA HC
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rolls and HYGEIA is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rolls Royce Holdings plc and HYGEIA HC HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYGEIA HC HLDGS and Rolls Royce 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 Rolls Royce Holdings plc are associated (or correlated) with HYGEIA HC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYGEIA HC HLDGS has no effect on the direction of Rolls Royce i.e., Rolls Royce and HYGEIA HC go up and down completely randomly.
Pair Corralation between Rolls Royce and HYGEIA HC
Assuming the 90 days horizon Rolls Royce Holdings plc is expected to generate 0.39 times more return on investment than HYGEIA HC. However, Rolls Royce Holdings plc is 2.56 times less risky than HYGEIA HC. It trades about 0.05 of its potential returns per unit of risk. HYGEIA HC HLDGS is currently generating about -0.12 per unit of risk. If you would invest 635.00 in Rolls Royce Holdings plc on August 30, 2024 and sell it today you would earn a total of 25.00 from holding Rolls Royce Holdings plc or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rolls Royce Holdings plc vs. HYGEIA HC HLDGS
Performance |
| Timeline |
| Rolls Royce Holdings |
| HYGEIA HC HLDGS |
Rolls Royce and HYGEIA HC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rolls Royce and HYGEIA HC
The main advantage of trading using opposite Rolls Royce and HYGEIA HC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rolls Royce position performs unexpectedly, HYGEIA HC 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 HYGEIA HC will offset losses from the drop in HYGEIA HC's long position.| Rolls Royce vs. PennantPark Investment | Rolls Royce vs. UNITED UTILITIES GR | Rolls Royce vs. HK Electric Investments | Rolls Royce vs. WisdomTree Investments |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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