Correlation Between Carsales and Hologic
Can any of the company-specific risk be diversified away by investing in both Carsales and Hologic 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 Carsales and Hologic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carsales and Hologic, you can compare the effects of market volatilities on Carsales and Hologic 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 Carsales with a short position of Hologic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and Hologic.
Diversification Opportunities for Carsales and Hologic
Pay attention - limited upside
The 3 months correlation between Carsales and Hologic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carsales and Hologic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hologic and Carsales 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 Carsales are associated (or correlated) with Hologic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hologic has no effect on the direction of Carsales i.e., Carsales and Hologic go up and down completely randomly.
Pair Corralation between Carsales and Hologic
If you would invest 1,386 in Carsales on September 2, 2024 and sell it today you would earn a total of 1,154 from holding Carsales or generate 83.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Carsales vs. Hologic
Performance |
| Timeline |
| Carsales |
| Hologic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Carsales and Hologic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and Hologic
The main advantage of trading using opposite Carsales and Hologic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales position performs unexpectedly, Hologic 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 Hologic will offset losses from the drop in Hologic's long position.The idea behind Carsales and Hologic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hologic vs. Hemisphere Energy Corp | Hologic vs. INTERSHOP Communications Aktiengesellschaft | Hologic vs. Japan Medical Dynamic | Hologic vs. MeVis Medical Solutions |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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