Correlation Between CM Hospitalar and G2D Investments
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar and G2D Investments 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 CM Hospitalar and G2D Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and G2D Investments, you can compare the effects of market volatilities on CM Hospitalar and G2D Investments 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 CM Hospitalar with a short position of G2D Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and G2D Investments.
Diversification Opportunities for CM Hospitalar and G2D Investments
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VVEO3 and G2D is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and G2D Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2D Investments and CM Hospitalar 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 CM Hospitalar SA are associated (or correlated) with G2D Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2D Investments has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and G2D Investments go up and down completely randomly.
Pair Corralation between CM Hospitalar and G2D Investments
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the G2D Investments. In addition to that, CM Hospitalar is 1.39 times more volatile than G2D Investments. It trades about -0.11 of its total potential returns per unit of risk. G2D Investments is currently generating about 0.0 per unit of volatility. If you would invest 192.00 in G2D Investments on November 28, 2024 and sell it today you would lose (28.00) from holding G2D Investments or give up 14.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. G2D Investments
Performance |
| Timeline |
| CM Hospitalar SA |
| G2D Investments |
CM Hospitalar and G2D Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and G2D Investments
The main advantage of trading using opposite CM Hospitalar and G2D Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar position performs unexpectedly, G2D Investments 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 G2D Investments will offset losses from the drop in G2D Investments' long position.| CM Hospitalar vs. Molson Coors Beverage | CM Hospitalar vs. The Home Depot | CM Hospitalar vs. Live Nation Entertainment, | CM Hospitalar vs. G2D Investments |
| G2D Investments vs. Capital One Financial | G2D Investments vs. Mitsubishi UFJ Financial | G2D Investments vs. Lloyds Banking Group | G2D Investments vs. JB Hunt Transport |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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