Correlation Between Worldwide Healthcare and Canadian General
Can any of the company-specific risk be diversified away by investing in both Worldwide Healthcare and Canadian General 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 Worldwide Healthcare and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldwide Healthcare Trust and Canadian General Investments, you can compare the effects of market volatilities on Worldwide Healthcare and Canadian General 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 Worldwide Healthcare with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldwide Healthcare and Canadian General.
Diversification Opportunities for Worldwide Healthcare and Canadian General
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Worldwide and Canadian is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Worldwide Healthcare Trust and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Worldwide Healthcare 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 Worldwide Healthcare Trust are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Worldwide Healthcare i.e., Worldwide Healthcare and Canadian General go up and down completely randomly.
Pair Corralation between Worldwide Healthcare and Canadian General
Assuming the 90 days trading horizon Worldwide Healthcare is expected to generate 5.43 times less return on investment than Canadian General. But when comparing it to its historical volatility, Worldwide Healthcare Trust is 1.6 times less risky than Canadian General. It trades about 0.01 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 181,736 in Canadian General Investments on October 12, 2024 and sell it today you would earn a total of 44,264 from holding Canadian General Investments or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldwide Healthcare Trust vs. Canadian General Investments
Performance |
| Timeline |
| Worldwide Healthcare |
| Canadian General Inv |
Worldwide Healthcare and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldwide Healthcare and Canadian General
The main advantage of trading using opposite Worldwide Healthcare and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldwide Healthcare position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Worldwide Healthcare vs. Impax Asset Management | Worldwide Healthcare vs. Waste Management | Worldwide Healthcare vs. Gaztransport et Technigaz | Worldwide Healthcare vs. Spire Healthcare Group |
| Canadian General vs. Various Eateries PLC | Canadian General vs. Trainline Plc | Canadian General vs. Symphony Environmental Technologies | Canadian General vs. Celebrus Technologies plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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