Correlation Between Universal Health and Catena Media
Can any of the company-specific risk be diversified away by investing in both Universal Health and Catena Media 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 Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services and Catena Media PLC, you can compare the effects of market volatilities on Universal Health and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Catena Media.
Diversification Opportunities for Universal Health and Catena Media
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and Catena is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Services are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Universal Health i.e., Universal Health and Catena Media go up and down completely randomly.
Pair Corralation between Universal Health and Catena Media
Assuming the 90 days trading horizon Universal Health Services is expected to generate 0.43 times more return on investment than Catena Media. However, Universal Health Services is 2.3 times less risky than Catena Media. It trades about 0.06 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.08 per unit of risk. If you would invest 12,080 in Universal Health Services on November 26, 2024 and sell it today you would earn a total of 5,980 from holding Universal Health Services or generate 49.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 87.78% |
Values | Daily Returns |
Universal Health Services vs. Catena Media PLC
Performance |
Timeline |
Universal Health Services |
Catena Media PLC |
Universal Health and Catena Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Universal Health and Catena Media
The main advantage of trading using opposite Universal Health and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.Universal Health vs. AMG Advanced Metallurgical | ||
Universal Health vs. First Class Metals | ||
Universal Health vs. Melia Hotels | ||
Universal Health vs. Power Metal Resources |
Catena Media vs. Samsung Electronics Co | ||
Catena Media vs. Reliance Industries Ltd | ||
Catena Media vs. OTP Bank Nyrt | ||
Catena Media vs. Coor Service Management |
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.
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |