Correlation Between Transportadora and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Transportadora and MEDICAL FACILITIES 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 Transportadora and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Transportadora and MEDICAL FACILITIES 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 Transportadora with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and MEDICAL FACILITIES.
Diversification Opportunities for Transportadora and MEDICAL FACILITIES
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transportadora and MEDICAL is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and Transportadora 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 Transportadora de Gas are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Transportadora i.e., Transportadora and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Transportadora and MEDICAL FACILITIES
Assuming the 90 days trading horizon Transportadora de Gas is expected to under-perform the MEDICAL FACILITIES. In addition to that, Transportadora is 2.65 times more volatile than MEDICAL FACILITIES NEW. It trades about -0.05 of its total potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about -0.06 per unit of volatility. If you would invest 1,070 in MEDICAL FACILITIES NEW on September 25, 2024 and sell it today you would lose (30.00) from holding MEDICAL FACILITIES NEW or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Transportadora de Gas |
| MEDICAL FACILITIES NEW |
Transportadora and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and MEDICAL FACILITIES
The main advantage of trading using opposite Transportadora and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Transportadora vs. Apple Inc | Transportadora vs. Apple Inc | Transportadora vs. Apple Inc | Transportadora vs. Apple Inc |
| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Medicover AB | MEDICAL FACILITIES vs. Charoen Pokphand Foods |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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