Correlation Between Spire Healthcare and Old Mutual
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare and Old Mutual 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 Old Mutual 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 Old Mutual, you can compare the effects of market volatilities on Spire Healthcare and Old Mutual 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 Old Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Old Mutual.
Diversification Opportunities for Spire Healthcare and Old Mutual
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spire and Old is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Old Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Mutual 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 Old Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Mutual has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Old Mutual go up and down completely randomly.
Pair Corralation between Spire Healthcare and Old Mutual
Assuming the 90 days trading horizon Spire Healthcare Group is expected to under-perform the Old Mutual. But the stock apears to be less risky and, when comparing its historical volatility, Spire Healthcare Group is 14.32 times less risky than Old Mutual. The stock trades about -0.12 of its potential returns per unit of risk. The Old Mutual is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,106 in Old Mutual on September 12, 2024 and sell it today you would earn a total of 3,684 from holding Old Mutual or generate 174.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Healthcare Group vs. Old Mutual
Performance |
| Timeline |
| Spire Healthcare |
| Old Mutual |
Spire Healthcare and Old Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Old Mutual
The main advantage of trading using opposite Spire Healthcare and Old Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare position performs unexpectedly, Old Mutual 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 Old Mutual will offset losses from the drop in Old Mutual's long position.| Spire Healthcare vs. Smithson Investment Trust | Spire Healthcare vs. Microchip Technology | Spire Healthcare vs. Ocean Harvest Technology | Spire Healthcare vs. Schroders Investment Trusts |
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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 Stocks Directory module to find actively traded stocks across global markets.
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