Correlation Between Wesfarmers and Oneview Healthcare
Can any of the company-specific risk be diversified away by investing in both Wesfarmers and Oneview 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 Wesfarmers and Oneview Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesfarmers and Oneview Healthcare PLC, you can compare the effects of market volatilities on Wesfarmers and Oneview 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 Wesfarmers with a short position of Oneview Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesfarmers and Oneview Healthcare.
Diversification Opportunities for Wesfarmers and Oneview Healthcare
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wesfarmers and Oneview is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wesfarmers and Oneview Healthcare PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oneview Healthcare PLC and Wesfarmers 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 Wesfarmers are associated (or correlated) with Oneview Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oneview Healthcare PLC has no effect on the direction of Wesfarmers i.e., Wesfarmers and Oneview Healthcare go up and down completely randomly.
Pair Corralation between Wesfarmers and Oneview Healthcare
Assuming the 90 days trading horizon Wesfarmers is expected to generate 2.99 times less return on investment than Oneview Healthcare. But when comparing it to its historical volatility, Wesfarmers is 4.99 times less risky than Oneview Healthcare. It trades about 0.11 of its potential returns per unit of risk. Oneview Healthcare PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Oneview Healthcare PLC on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Oneview Healthcare PLC or generate 175.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wesfarmers vs. Oneview Healthcare PLC
Performance |
Timeline |
Wesfarmers |
Oneview Healthcare PLC |
Wesfarmers and Oneview Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wesfarmers and Oneview Healthcare
The main advantage of trading using opposite Wesfarmers and Oneview Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesfarmers position performs unexpectedly, Oneview 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 Oneview Healthcare will offset losses from the drop in Oneview Healthcare's long position.Wesfarmers vs. Farm Pride Foods | Wesfarmers vs. Premier Investments | Wesfarmers vs. Hotel Property Investments | Wesfarmers vs. Dicker Data |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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