Correlation Between Spire Healthcare and Dassault Aviation
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare and Dassault Aviation 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 Spire Healthcare and Dassault Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and Dassault Aviation SA, you can compare the effects of market volatilities on Spire Healthcare and Dassault Aviation 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 Spire Healthcare with a short position of Dassault Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Dassault Aviation.
Diversification Opportunities for Spire Healthcare and Dassault Aviation
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spire and Dassault is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Dassault Aviation SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Aviation and Spire Healthcare 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 Spire Healthcare Group are associated (or correlated) with Dassault Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Aviation has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Dassault Aviation go up and down completely randomly.
Pair Corralation between Spire Healthcare and Dassault Aviation
Assuming the 90 days trading horizon Spire Healthcare Group is expected to generate 0.75 times more return on investment than Dassault Aviation. However, Spire Healthcare Group is 1.34 times less risky than Dassault Aviation. It trades about 0.15 of its potential returns per unit of risk. Dassault Aviation SA is currently generating about 0.05 per unit of risk. If you would invest 21,700 in Spire Healthcare Group on September 3, 2024 and sell it today you would earn a total of 850.00 from holding Spire Healthcare Group or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Healthcare Group vs. Dassault Aviation SA
Performance |
| Timeline |
| Spire Healthcare |
| Dassault Aviation |
Spire Healthcare and Dassault Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Dassault Aviation
The main advantage of trading using opposite Spire Healthcare and Dassault Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare position performs unexpectedly, Dassault Aviation 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 Dassault Aviation will offset losses from the drop in Dassault Aviation's long position.| Spire Healthcare vs. Porvair plc | Spire Healthcare vs. Norman Broadbent Plc | Spire Healthcare vs. Broadridge Financial Solutions | Spire Healthcare vs. X FAB Silicon Foundries |
| Dassault Aviation vs. Induction Healthcare Group | Dassault Aviation vs. Spire Healthcare Group | Dassault Aviation vs. Vulcan Materials Co | Dassault Aviation vs. CVS Health Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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