Correlation Between WELL Health and New Found
Can any of the company-specific risk be diversified away by investing in both WELL Health and New Found 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 New Found 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 New Found Gold, you can compare the effects of market volatilities on WELL Health and New Found 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 New Found. Check out your portfolio center. Please also check ongoing floating volatility patterns of WELL Health and New Found.
Diversification Opportunities for WELL Health and New Found
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WELL and New is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding WELL Health Technologies and New Found Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Found Gold 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 New Found. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Found Gold has no effect on the direction of WELL Health i.e., WELL Health and New Found go up and down completely randomly.
Pair Corralation between WELL Health and New Found
Assuming the 90 days trading horizon WELL Health Technologies is expected to generate 0.7 times more return on investment than New Found. However, WELL Health Technologies is 1.43 times less risky than New Found. It trades about 0.46 of its potential returns per unit of risk. New Found Gold is currently generating about -0.08 per unit of risk. If you would invest 512.00 in WELL Health Technologies on September 13, 2024 and sell it today you would earn a total of 157.00 from holding WELL Health Technologies or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WELL Health Technologies vs. New Found Gold
Performance |
| Timeline |
| WELL Health Technologies |
| New Found Gold |
WELL Health and New Found Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WELL Health and New Found
The main advantage of trading using opposite WELL Health and New Found positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WELL Health position performs unexpectedly, New Found 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 New Found will offset losses from the drop in New Found's long position.| WELL Health vs. Extendicare | WELL Health vs. Sienna Senior Living | WELL Health vs. Rogers Sugar | WELL Health vs. Chemtrade Logistics Income |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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