Correlation Between Therma Bright and Hemostemix
Can any of the company-specific risk be diversified away by investing in both Therma Bright and Hemostemix 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 Therma Bright and Hemostemix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Therma Bright and Hemostemix, you can compare the effects of market volatilities on Therma Bright and Hemostemix 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 Therma Bright with a short position of Hemostemix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Therma Bright and Hemostemix.
Diversification Opportunities for Therma Bright and Hemostemix
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Therma and Hemostemix is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Therma Bright and Hemostemix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemostemix and Therma Bright 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 Therma Bright are associated (or correlated) with Hemostemix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemostemix has no effect on the direction of Therma Bright i.e., Therma Bright and Hemostemix go up and down completely randomly.
Pair Corralation between Therma Bright and Hemostemix
Assuming the 90 days trading horizon Therma Bright is expected to under-perform the Hemostemix. But the stock apears to be less risky and, when comparing its historical volatility, Therma Bright is 1.15 times less risky than Hemostemix. The stock trades about -0.18 of its potential returns per unit of risk. The Hemostemix is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Hemostemix on September 4, 2024 and sell it today you would lose (3.00) from holding Hemostemix or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Therma Bright vs. Hemostemix
Performance |
| Timeline |
| Therma Bright |
| Hemostemix |
Therma Bright and Hemostemix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Therma Bright and Hemostemix
The main advantage of trading using opposite Therma Bright and Hemostemix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Therma Bright position performs unexpectedly, Hemostemix 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 Hemostemix will offset losses from the drop in Hemostemix's long position.| Therma Bright vs. Walmart Inc CDR | Therma Bright vs. Amazon CDR | Therma Bright vs. Berkshire Hathaway CDR | Therma Bright vs. UnitedHealth Group CDR |
| Hemostemix vs. Vaxil Bio | Hemostemix vs. VentriPoint Diagnostics | Hemostemix vs. MedMira | Hemostemix vs. Therma Bright |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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