Correlation Between Abingdon Health and Dolly Varden

Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Dolly Varden 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 Abingdon Health and Dolly Varden into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abingdon Health Plc and Dolly Varden Silver, you can compare the effects of market volatilities on Abingdon Health and Dolly Varden 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 Abingdon Health with a short position of Dolly Varden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Dolly Varden.

Diversification Opportunities for Abingdon Health and Dolly Varden

-0.23

Correlation Coefficient

Abingdon Health  Dolly Varden

Very good diversification

The 3 months correlation between Abingdon and Dolly is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Dolly Varden Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolly Varden Silver and Abingdon 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 Abingdon Health Plc are associated (or correlated) with Dolly Varden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolly Varden Silver has no effect on the direction of Abingdon Health i.e., Abingdon Health and Dolly Varden go up and down completely randomly.

Pair Corralation between Abingdon Health and Dolly Varden

Assuming the 90 days trading horizon Abingdon Health is expected to generate 1.16 times less return on investment than Dolly Varden. But when comparing it to its historical volatility, Abingdon Health Plc is 1.26 times less risky than Dolly Varden. It trades about 0.04 of its potential returns per unit of risk. Dolly Varden Silver is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  85.00  in Dolly Varden Silver on October 11, 2024 and sell it today you would earn a total of  10.00  from holding Dolly Varden Silver or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.99%
Values	Daily Returns

Abingdon Health Plc  vs.  Dolly Varden Silver

Abingdon Health Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abingdon Health Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Dolly Varden Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dolly Varden Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Abingdon Health and Dolly Varden

The main advantage of trading using opposite Abingdon Health and Dolly Varden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health position performs unexpectedly, Dolly Varden 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 Dolly Varden will offset losses from the drop in Dolly Varden's long position.

The idea behind Abingdon Health Plc and Dolly Varden Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..