Correlation Between Spire Healthcare and Primary Health
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare and Primary 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 Primary 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 Primary Health Properties, you can compare the effects of market volatilities on Spire Healthcare and Primary 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 Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Primary Health.
Diversification Opportunities for Spire Healthcare and Primary Health
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and Primary is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Primary Health go up and down completely randomly.
Pair Corralation between Spire Healthcare and Primary Health
Assuming the 90 days trading horizon Spire Healthcare Group is expected to generate 0.83 times more return on investment than Primary Health. However, Spire Healthcare Group is 1.2 times less risky than Primary Health. It trades about 0.12 of its potential returns per unit of risk. Primary Health Properties is currently generating about 0.06 per unit of risk. If you would invest 22,700 in Spire Healthcare Group on November 7, 2024 and sell it today you would earn a total of 700.00 from holding Spire Healthcare Group or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Spire Healthcare Group vs. Primary Health Properties
Performance |
| Timeline |
| Spire Healthcare |
| Primary Health Properties |
Spire Healthcare and Primary Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Primary Health
The main advantage of trading using opposite Spire Healthcare and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare position performs unexpectedly, Primary 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 Primary Health will offset losses from the drop in Primary Health's long position.| Spire Healthcare vs. Compal Electronics GDR | Spire Healthcare vs. Ubisoft Entertainment | Spire Healthcare vs. United States Steel | Spire Healthcare vs. Atresmedia |
| Primary Health vs. Telecom Italia SpA | Primary Health vs. Infineon Technologies AG | Primary Health vs. MoneysupermarketCom Group PLC | Primary Health vs. Logitech International SA |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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