Correlation Between WELL Health and Cineplex
Can any of the company-specific risk be diversified away by investing in both WELL Health and Cineplex 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 WELL Health and Cineplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WELL Health Technologies and Cineplex, you can compare the effects of market volatilities on WELL Health and Cineplex 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 WELL Health with a short position of Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of WELL Health and Cineplex.
Diversification Opportunities for WELL Health and Cineplex
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WELL and Cineplex is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WELL Health Technologies and Cineplex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineplex and WELL Health 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 WELL Health Technologies are associated (or correlated) with Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cineplex has no effect on the direction of WELL Health i.e., WELL Health and Cineplex go up and down completely randomly.
Pair Corralation between WELL Health and Cineplex
Assuming the 90 days trading horizon WELL Health Technologies is expected to generate 1.68 times more return on investment than Cineplex. However, WELL Health is 1.68 times more volatile than Cineplex. It trades about 0.11 of its potential returns per unit of risk. Cineplex is currently generating about -0.04 per unit of risk. If you would invest 452.00 in WELL Health Technologies on August 29, 2024 and sell it today you would earn a total of 78.00 from holding WELL Health Technologies or generate 17.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WELL Health Technologies vs. Cineplex
Performance |
| Timeline |
| WELL Health Technologies |
| Cineplex |
WELL Health and Cineplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WELL Health and Cineplex
The main advantage of trading using opposite WELL Health and Cineplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WELL Health position performs unexpectedly, Cineplex 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 Cineplex will offset losses from the drop in Cineplex's long position.| WELL Health vs. Solar Alliance Energy | WELL Health vs. Braille Energy Systems | WELL Health vs. MedMira | WELL Health vs. Lite Access Technologies |
| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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