Correlation Between Worldwide Healthcare and Cordel Group
Can any of the company-specific risk be diversified away by investing in both Worldwide Healthcare and Cordel Group 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 Cordel Group 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 Cordel Group PLC, you can compare the effects of market volatilities on Worldwide Healthcare and Cordel Group 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 Cordel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldwide Healthcare and Cordel Group.
Diversification Opportunities for Worldwide Healthcare and Cordel Group
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Worldwide and Cordel is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Worldwide Healthcare Trust and Cordel Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cordel Group PLC 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 Cordel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cordel Group PLC has no effect on the direction of Worldwide Healthcare i.e., Worldwide Healthcare and Cordel Group go up and down completely randomly.
Pair Corralation between Worldwide Healthcare and Cordel Group
Assuming the 90 days trading horizon Worldwide Healthcare Trust is expected to under-perform the Cordel Group. But the stock apears to be less risky and, when comparing its historical volatility, Worldwide Healthcare Trust is 1.46 times less risky than Cordel Group. The stock trades about -0.08 of its potential returns per unit of risk. The Cordel Group PLC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 750.00 in Cordel Group PLC on November 28, 2024 and sell it today you would earn a total of 25.00 from holding Cordel Group PLC or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldwide Healthcare Trust vs. Cordel Group PLC
Performance |
| Timeline |
| Worldwide Healthcare |
| Cordel Group PLC |
Worldwide Healthcare and Cordel Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldwide Healthcare and Cordel Group
The main advantage of trading using opposite Worldwide Healthcare and Cordel Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldwide Healthcare position performs unexpectedly, Cordel Group 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 Cordel Group will offset losses from the drop in Cordel Group's long position.| Worldwide Healthcare vs. China Pacific Insurance | Worldwide Healthcare vs. Monks Investment Trust | Worldwide Healthcare vs. Berner Kantonalbank AG | Worldwide Healthcare vs. Vietnam Enterprise Investments |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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