Correlation Between Spire Healthcare and Optima Health
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare and Optima 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 Spire Healthcare and Optima Health 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 Optima Health plc, you can compare the effects of market volatilities on Spire Healthcare and Optima 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 Spire Healthcare with a short position of Optima Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Optima Health.
Diversification Opportunities for Spire Healthcare and Optima Health
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spire and Optima is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Optima Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima Health plc 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 Optima Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima Health plc has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Optima Health go up and down completely randomly.
Pair Corralation between Spire Healthcare and Optima Health
Assuming the 90 days trading horizon Spire Healthcare Group is expected to under-perform the Optima Health. But the stock apears to be less risky and, when comparing its historical volatility, Spire Healthcare Group is 1.0 times less risky than Optima Health. The stock trades about -0.13 of its potential returns per unit of risk. The Optima Health plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15,100 in Optima Health plc on September 2, 2024 and sell it today you would earn a total of 450.00 from holding Optima Health plc or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Spire Healthcare Group vs. Optima Health plc
Performance |
| Timeline |
| Spire Healthcare |
| Optima Health plc |
Spire Healthcare and Optima Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Optima Health
The main advantage of trading using opposite Spire Healthcare and Optima Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare position performs unexpectedly, Optima 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 Optima Health will offset losses from the drop in Optima Health's long position.| Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Hyundai Motor | Spire Healthcare vs. Toyota Motor Corp |
| Optima Health vs. Toyota Motor Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Las Vegas Sands | Optima Health vs. Yum Brands |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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