Correlation Between CM Hospitalar and Technos SA
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar and Technos SA 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 Technos SA 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 Technos SA, you can compare the effects of market volatilities on CM Hospitalar and Technos SA 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 Technos SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and Technos SA.
Diversification Opportunities for CM Hospitalar and Technos SA
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between VVEO3 and Technos is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and Technos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technos SA 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 Technos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technos SA has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and Technos SA go up and down completely randomly.
Pair Corralation between CM Hospitalar and Technos SA
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the Technos SA. In addition to that, CM Hospitalar is 1.58 times more volatile than Technos SA. It trades about -0.03 of its total potential returns per unit of risk. Technos SA is currently generating about 0.08 per unit of volatility. If you would invest 414.00 in Technos SA on August 28, 2024 and sell it today you would earn a total of 137.00 from holding Technos SA or generate 33.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. Technos SA
Performance |
| Timeline |
| CM Hospitalar SA |
| Technos SA |
CM Hospitalar and Technos SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and Technos SA
The main advantage of trading using opposite CM Hospitalar and Technos SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar position performs unexpectedly, Technos SA 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 Technos SA will offset losses from the drop in Technos SA's long position.| CM Hospitalar vs. Dell Technologies | CM Hospitalar vs. Technos SA | CM Hospitalar vs. Brpr Corporate Offices | CM Hospitalar vs. salesforce inc |
| Technos SA vs. Baidu Inc | Technos SA vs. Deutsche Bank Aktiengesellschaft | Technos SA vs. HSBC Holdings plc | Technos SA vs. The Bank of |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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