Correlation Between Universal Health and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Universal Health and Superior Plus 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 Universal Health and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services and Superior Plus Corp, you can compare the effects of market volatilities on Universal Health and Superior Plus 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 Universal Health with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Superior Plus.
Diversification Opportunities for Universal Health and Superior Plus
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Superior is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Universal Health 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 Universal Health Services are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Universal Health i.e., Universal Health and Superior Plus go up and down completely randomly.
Pair Corralation between Universal Health and Superior Plus
Assuming the 90 days horizon Universal Health Services is expected to generate 0.88 times more return on investment than Superior Plus. However, Universal Health Services is 1.13 times less risky than Superior Plus. It trades about 0.05 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.02 per unit of risk. If you would invest 13,398 in Universal Health Services on September 12, 2024 and sell it today you would earn a total of 4,802 from holding Universal Health Services or generate 35.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Services vs. Superior Plus Corp
Performance |
| Timeline |
| Universal Health Services |
| Superior Plus Corp |
Universal Health and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Superior Plus
The main advantage of trading using opposite Universal Health and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Universal Health vs. The Hanover Insurance | Universal Health vs. BANKINTER ADR 2007 | Universal Health vs. Corporate Office Properties | Universal Health vs. Infrastrutture Wireless Italiane |
| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |