Correlation Between Viva Leisure and Global Health
Can any of the company-specific risk be diversified away by investing in both Viva Leisure and Global Health 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 Viva Leisure and Global Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viva Leisure and Global Health, you can compare the effects of market volatilities on Viva Leisure and Global Health 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 Viva Leisure with a short position of Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viva Leisure and Global Health.
Diversification Opportunities for Viva Leisure and Global Health
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Viva and Global is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Viva Leisure and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health and Viva Leisure 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 Viva Leisure are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Viva Leisure i.e., Viva Leisure and Global Health go up and down completely randomly.
Pair Corralation between Viva Leisure and Global Health
Assuming the 90 days trading horizon Viva Leisure is expected to generate 0.89 times more return on investment than Global Health. However, Viva Leisure is 1.13 times less risky than Global Health. It trades about 0.05 of its potential returns per unit of risk. Global Health is currently generating about -0.1 per unit of risk. If you would invest 136.00 in Viva Leisure on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Viva Leisure or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viva Leisure vs. Global Health
Performance |
| Timeline |
| Viva Leisure |
| Global Health |
Viva Leisure and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viva Leisure and Global Health
The main advantage of trading using opposite Viva Leisure and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viva Leisure position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.| Viva Leisure vs. Richmond Vanadium Technology | Viva Leisure vs. Dexus Convenience Retail | Viva Leisure vs. Retail Food Group | Viva Leisure vs. Janison Education Group |
| Global Health vs. Clime Investment Management | Global Health vs. Super Retail Group | Global Health vs. Dexus Convenience Retail | Global Health vs. Fisher Paykel Healthcare |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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