Correlation Between Westaim Corp and Comprehensive Healthcare
Can any of the company-specific risk be diversified away by investing in both Westaim Corp and Comprehensive 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 Westaim Corp and Comprehensive Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westaim Corp and Comprehensive Healthcare Systems, you can compare the effects of market volatilities on Westaim Corp and Comprehensive 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 Westaim Corp with a short position of Comprehensive Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westaim Corp and Comprehensive Healthcare.
Diversification Opportunities for Westaim Corp and Comprehensive Healthcare
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westaim and Comprehensive is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Westaim Corp and Comprehensive Healthcare Syste in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comprehensive Healthcare and Westaim Corp 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 Westaim Corp are associated (or correlated) with Comprehensive Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comprehensive Healthcare has no effect on the direction of Westaim Corp i.e., Westaim Corp and Comprehensive Healthcare go up and down completely randomly.
Pair Corralation between Westaim Corp and Comprehensive Healthcare
Assuming the 90 days horizon Westaim Corp is expected to generate 4.66 times less return on investment than Comprehensive Healthcare. But when comparing it to its historical volatility, Westaim Corp is 4.46 times less risky than Comprehensive Healthcare. It trades about 0.09 of its potential returns per unit of risk. Comprehensive Healthcare Systems is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.50 in Comprehensive Healthcare Systems on September 3, 2024 and sell it today you would earn a total of 0.50 from holding Comprehensive Healthcare Systems or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westaim Corp vs. Comprehensive Healthcare Syste
Performance |
| Timeline |
| Westaim Corp |
| Comprehensive Healthcare |
Westaim Corp and Comprehensive Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westaim Corp and Comprehensive Healthcare
The main advantage of trading using opposite Westaim Corp and Comprehensive Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westaim Corp position performs unexpectedly, Comprehensive 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 Comprehensive Healthcare will offset losses from the drop in Comprehensive Healthcare's long position.| Westaim Corp vs. Pulse Seismic | Westaim Corp vs. Quarterhill | Westaim Corp vs. Kneat Inc | Westaim Corp vs. Trisura Group |
| Comprehensive Healthcare vs. Westaim Corp | Comprehensive Healthcare vs. Pulse Seismic | Comprehensive Healthcare vs. Quarterhill | Comprehensive Healthcare vs. TECSYS Inc |
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.
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