Correlation Between Cross Country and Hays Plc
Can any of the company-specific risk be diversified away by investing in both Cross Country and Hays Plc 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 Cross Country and Hays Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cross Country Healthcare and Hays plc, you can compare the effects of market volatilities on Cross Country and Hays Plc 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 Cross Country with a short position of Hays Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cross Country and Hays Plc.
Diversification Opportunities for Cross Country and Hays Plc
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cross and Hays is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cross Country Healthcare and Hays plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hays plc and Cross Country 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 Cross Country Healthcare are associated (or correlated) with Hays Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hays plc has no effect on the direction of Cross Country i.e., Cross Country and Hays Plc go up and down completely randomly.
Pair Corralation between Cross Country and Hays Plc
Assuming the 90 days horizon Cross Country Healthcare is expected to under-perform the Hays Plc. In addition to that, Cross Country is 1.23 times more volatile than Hays plc. It trades about -0.01 of its total potential returns per unit of risk. Hays plc is currently generating about -0.01 per unit of volatility. If you would invest 96.00 in Hays plc on September 2, 2024 and sell it today you would lose (2.00) from holding Hays plc or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cross Country Healthcare vs. Hays plc
Performance |
| Timeline |
| Cross Country Healthcare |
| Hays plc |
Cross Country and Hays Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cross Country and Hays Plc
The main advantage of trading using opposite Cross Country and Hays Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cross Country position performs unexpectedly, Hays Plc 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 Hays Plc will offset losses from the drop in Hays Plc's long position.| Cross Country vs. SMA Solar Technology | Cross Country vs. Align Technology | Cross Country vs. Micron Technology | Cross Country vs. Transportadora de Gas |
| Hays Plc vs. National Bank Holdings | Hays Plc vs. SEI INVESTMENTS | Hays Plc vs. EAT WELL INVESTMENT | Hays Plc vs. SLR Investment Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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