Correlation Between VAT Group and HBM Healthcare
Can any of the company-specific risk be diversified away by investing in both VAT Group and HBM Healthcare 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 VAT Group and HBM Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VAT Group AG and HBM Healthcare Investments, you can compare the effects of market volatilities on VAT Group and HBM Healthcare 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 VAT Group with a short position of HBM Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of VAT Group and HBM Healthcare.
Diversification Opportunities for VAT Group and HBM Healthcare
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VAT and HBM is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and HBM Healthcare Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HBM Healthcare Inves and VAT Group 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 VAT Group AG are associated (or correlated) with HBM Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HBM Healthcare Inves has no effect on the direction of VAT Group i.e., VAT Group and HBM Healthcare go up and down completely randomly.
Pair Corralation between VAT Group and HBM Healthcare
Assuming the 90 days trading horizon VAT Group is expected to generate 49.38 times less return on investment than HBM Healthcare. In addition to that, VAT Group is 1.06 times more volatile than HBM Healthcare Investments. It trades about 0.0 of its total potential returns per unit of risk. HBM Healthcare Investments is currently generating about 0.18 per unit of volatility. If you would invest 17,700 in HBM Healthcare Investments on October 24, 2024 and sell it today you would earn a total of 1,060 from holding HBM Healthcare Investments or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VAT Group AG vs. HBM Healthcare Investments
Performance |
| Timeline |
| VAT Group AG |
| HBM Healthcare Inves |
VAT Group and HBM Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VAT Group and HBM Healthcare
The main advantage of trading using opposite VAT Group and HBM Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VAT Group position performs unexpectedly, HBM Healthcare 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 HBM Healthcare will offset losses from the drop in HBM Healthcare's long position.| VAT Group vs. Sika AG | VAT Group vs. Straumann Holding AG | VAT Group vs. Geberit AG | VAT Group vs. Partners Group Holding |
| HBM Healthcare vs. BB Biotech AG | HBM Healthcare vs. Partners Group Holding | HBM Healthcare vs. Tecan Group AG | HBM Healthcare vs. VAT Group AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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