Correlation Between CHC Healthcare and Jetwell Computer
Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and Jetwell Computer 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 CHC Healthcare and Jetwell Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHC Healthcare Group and Jetwell Computer Co, you can compare the effects of market volatilities on CHC Healthcare and Jetwell Computer 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 CHC Healthcare with a short position of Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and Jetwell Computer.
Diversification Opportunities for CHC Healthcare and Jetwell Computer
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHC and Jetwell is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CHC Healthcare Group and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer and CHC 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 CHC Healthcare Group are associated (or correlated) with Jetwell Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetwell Computer has no effect on the direction of CHC Healthcare i.e., CHC Healthcare and Jetwell Computer go up and down completely randomly.
Pair Corralation between CHC Healthcare and Jetwell Computer
Assuming the 90 days trading horizon CHC Healthcare Group is expected to generate 0.73 times more return on investment than Jetwell Computer. However, CHC Healthcare Group is 1.36 times less risky than Jetwell Computer. It trades about -0.02 of its potential returns per unit of risk. Jetwell Computer Co is currently generating about -0.02 per unit of risk. If you would invest 4,305 in CHC Healthcare Group on September 14, 2024 and sell it today you would lose (155.00) from holding CHC Healthcare Group or give up 3.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CHC Healthcare Group vs. Jetwell Computer Co
Performance |
Timeline |
CHC Healthcare Group |
Jetwell Computer |
CHC Healthcare and Jetwell Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHC Healthcare and Jetwell Computer
The main advantage of trading using opposite CHC Healthcare and Jetwell Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHC Healthcare position performs unexpectedly, Jetwell Computer 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 Jetwell Computer will offset losses from the drop in Jetwell Computer's long position.CHC Healthcare vs. Apex Biotechnology Corp | CHC Healthcare vs. Ruentex Development Co | CHC Healthcare vs. WiseChip Semiconductor | CHC Healthcare vs. Novatek Microelectronics 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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