Correlation Between WashTec AG and Regional Health
Can any of the company-specific risk be diversified away by investing in both WashTec AG and Regional Health 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 WashTec AG and Regional Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WashTec AG and Regional Health Properties, you can compare the effects of market volatilities on WashTec AG and Regional Health 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 WashTec AG with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of WashTec AG and Regional Health.
Diversification Opportunities for WashTec AG and Regional Health
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WashTec and Regional is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding WashTec AG and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop and WashTec AG 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 WashTec AG are associated (or correlated) with Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of WashTec AG i.e., WashTec AG and Regional Health go up and down completely randomly.
Pair Corralation between WashTec AG and Regional Health
Assuming the 90 days horizon WashTec AG is expected to generate 0.44 times more return on investment than Regional Health. However, WashTec AG is 2.26 times less risky than Regional Health. It trades about 0.38 of its potential returns per unit of risk. Regional Health Properties is currently generating about 0.04 per unit of risk. If you would invest 318.00 in WashTec AG on September 3, 2024 and sell it today you would earn a total of 93.00 from holding WashTec AG or generate 29.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WashTec AG vs. Regional Health Properties
Performance |
| Timeline |
| WashTec AG |
| Regional Health Prop |
WashTec AG and Regional Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WashTec AG and Regional Health
The main advantage of trading using opposite WashTec AG and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WashTec AG position performs unexpectedly, Regional Health 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 Regional Health will offset losses from the drop in Regional Health's long position.| WashTec AG vs. Ramsay Health Care | WashTec AG vs. Medical Facilities | WashTec AG vs. Jack Nathan Medical | WashTec AG vs. Fresenius SE Co |
| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
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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