Correlation Between So Young and Patterson Companies
Can any of the company-specific risk be diversified away by investing in both So Young and Patterson Companies 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 So Young and Patterson Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between So Young International and Patterson Companies, you can compare the effects of market volatilities on So Young and Patterson Companies 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 So Young with a short position of Patterson Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of So Young and Patterson Companies.
Diversification Opportunities for So Young and Patterson Companies
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between So Young and Patterson is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding So Young International and Patterson Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson Companies and So Young 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 So Young International are associated (or correlated) with Patterson Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson Companies has no effect on the direction of So Young i.e., So Young and Patterson Companies go up and down completely randomly.
Pair Corralation between So Young and Patterson Companies
Allowing for the 90-day total investment horizon So Young International is expected to generate 2.54 times more return on investment than Patterson Companies. However, So Young is 2.54 times more volatile than Patterson Companies. It trades about 0.03 of its potential returns per unit of risk. Patterson Companies is currently generating about -0.01 per unit of risk. If you would invest 77.00 in So Young International on August 31, 2024 and sell it today you would earn a total of 6.00 from holding So Young International or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
So Young International vs. Patterson Companies
Performance |
| Timeline |
| So Young International |
| Patterson Companies |
So Young and Patterson Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with So Young and Patterson Companies
The main advantage of trading using opposite So Young and Patterson Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if So Young position performs unexpectedly, Patterson Companies 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 Patterson Companies will offset losses from the drop in Patterson Companies' long position.| So Young vs. National Research Corp | So Young vs. Definitive Healthcare Corp | So Young vs. HealthStream | So Young vs. Streamline Health Solutions |
| Patterson Companies vs. Owens Minor | Patterson Companies vs. Cardinal Health | Patterson Companies vs. McKesson | Patterson Companies vs. Henry Schein |
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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