Correlation Between Simulations Plus and MultiPlan
Can any of the company-specific risk be diversified away by investing in both Simulations Plus and MultiPlan 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 Simulations Plus and MultiPlan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simulations Plus and MultiPlan, you can compare the effects of market volatilities on Simulations Plus and MultiPlan 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 Simulations Plus with a short position of MultiPlan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simulations Plus and MultiPlan.
Diversification Opportunities for Simulations Plus and MultiPlan
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simulations and MultiPlan is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Simulations Plus and MultiPlan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MultiPlan and Simulations Plus 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 Simulations Plus are associated (or correlated) with MultiPlan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MultiPlan has no effect on the direction of Simulations Plus i.e., Simulations Plus and MultiPlan go up and down completely randomly.
Pair Corralation between Simulations Plus and MultiPlan
Considering the 90-day investment horizon Simulations Plus is expected to generate 0.37 times more return on investment than MultiPlan. However, Simulations Plus is 2.7 times less risky than MultiPlan. It trades about -0.02 of its potential returns per unit of risk. MultiPlan is currently generating about -0.05 per unit of risk. If you would invest 3,215 in Simulations Plus on September 12, 2024 and sell it today you would lose (70.00) from holding Simulations Plus or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Simulations Plus vs. MultiPlan
Performance |
| Timeline |
| Simulations Plus |
| MultiPlan |
Simulations Plus and MultiPlan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simulations Plus and MultiPlan
The main advantage of trading using opposite Simulations Plus and MultiPlan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simulations Plus position performs unexpectedly, MultiPlan 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 MultiPlan will offset losses from the drop in MultiPlan's long position.| Simulations Plus vs. Definitive Healthcare Corp | Simulations Plus vs. National Research Corp | Simulations Plus vs. Evolent Health | Simulations Plus vs. Privia Health Group |
| MultiPlan vs. National Research Corp | MultiPlan vs. Evolent Health | MultiPlan vs. Simulations Plus | MultiPlan vs. Privia Health Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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