Correlation Between Universal Health and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both Universal Health and ASPEN TECHINC 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 Universal Health and ASPEN TECHINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Realty and ASPEN TECHINC DL, you can compare the effects of market volatilities on Universal Health and ASPEN TECHINC 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 Universal Health with a short position of ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and ASPEN TECHINC.
Diversification Opportunities for Universal Health and ASPEN TECHINC
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Universal and ASPEN is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL and Universal Health 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 Universal Health Realty are associated (or correlated) with ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of Universal Health i.e., Universal Health and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between Universal Health and ASPEN TECHINC
Assuming the 90 days horizon Universal Health Realty is expected to generate 1.64 times more return on investment than ASPEN TECHINC. However, Universal Health is 1.64 times more volatile than ASPEN TECHINC DL. It trades about 0.26 of its potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.27 per unit of risk. If you would invest 3,460 in Universal Health Realty on October 31, 2024 and sell it today you would earn a total of 278.00 from holding Universal Health Realty or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. ASPEN TECHINC DL
Performance |
| Timeline |
| Universal Health Realty |
| ASPEN TECHINC DL |
Universal Health and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and ASPEN TECHINC
The main advantage of trading using opposite Universal Health and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.| Universal Health vs. Phibro Animal Health | Universal Health vs. National Health Investors | Universal Health vs. MARKET VECTR RETAIL | Universal Health vs. H2O Retailing |
| ASPEN TECHINC vs. Strategic Education | ASPEN TECHINC vs. IDP EDUCATION LTD | ASPEN TECHINC vs. EEDUCATION ALBERT AB | ASPEN TECHINC vs. EMBARK EDUCATION LTD |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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