Correlation Between TaiMed Biologics and CHC Healthcare
Can any of the company-specific risk be diversified away by investing in both TaiMed Biologics and CHC Healthcare 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 TaiMed Biologics and CHC Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TaiMed Biologics and CHC Healthcare Group, you can compare the effects of market volatilities on TaiMed Biologics and CHC Healthcare 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 TaiMed Biologics with a short position of CHC Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of TaiMed Biologics and CHC Healthcare.
Diversification Opportunities for TaiMed Biologics and CHC Healthcare
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TaiMed and CHC is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding TaiMed Biologics and CHC Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHC Healthcare Group and TaiMed Biologics 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 TaiMed Biologics are associated (or correlated) with CHC Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHC Healthcare Group has no effect on the direction of TaiMed Biologics i.e., TaiMed Biologics and CHC Healthcare go up and down completely randomly.
Pair Corralation between TaiMed Biologics and CHC Healthcare
Assuming the 90 days trading horizon TaiMed Biologics is expected to generate 0.95 times more return on investment than CHC Healthcare. However, TaiMed Biologics is 1.05 times less risky than CHC Healthcare. It trades about 0.02 of its potential returns per unit of risk. CHC Healthcare Group is currently generating about -0.04 per unit of risk. If you would invest 8,110 in TaiMed Biologics on September 24, 2024 and sell it today you would earn a total of 100.00 from holding TaiMed Biologics or generate 1.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TaiMed Biologics vs. CHC Healthcare Group
Performance |
Timeline |
TaiMed Biologics |
CHC Healthcare Group |
TaiMed Biologics and CHC Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TaiMed Biologics and CHC Healthcare
The main advantage of trading using opposite TaiMed Biologics and CHC Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TaiMed Biologics position performs unexpectedly, CHC Healthcare 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 CHC Healthcare will offset losses from the drop in CHC Healthcare's long position.TaiMed Biologics vs. CHC Healthcare Group | TaiMed Biologics vs. GenMont Biotech | TaiMed Biologics vs. Sinphar Pharmaceutical Co | TaiMed Biologics vs. Abnova Taiwan Corp |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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