Correlation Between Hospital Mater and ConocoPhillips

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

By analyzing existing cross correlation between Hospital Mater Dei and ConocoPhillips, you can compare the effects of market volatilities on Hospital Mater and ConocoPhillips 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 Hospital Mater with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and ConocoPhillips.

Diversification Opportunities for Hospital Mater and ConocoPhillips

-0.4

Correlation Coefficient

Hospital Mater  ConocoPhillips

Very good diversification

The 3 months correlation between Hospital and ConocoPhillips is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Hospital Mater i.e., Hospital Mater and ConocoPhillips go up and down completely randomly.

Pair Corralation between Hospital Mater and ConocoPhillips

Assuming the 90 days trading horizon Hospital Mater Dei is expected to generate 1.47 times more return on investment than ConocoPhillips. However, Hospital Mater is 1.47 times more volatile than ConocoPhillips. It trades about 0.07 of its potential returns per unit of risk. ConocoPhillips is currently generating about -0.01 per unit of risk. If you would invest  364.00  in Hospital Mater Dei on December 28, 2024 and sell it today you would earn a total of  44.00  from holding Hospital Mater Dei or generate 12.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hospital Mater Dei  vs.  ConocoPhillips

Hospital Mater Dei

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hospital Mater Dei are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Hospital Mater unveiled solid returns over the last few months and may actually be approaching a breakup point.

ConocoPhillips

Risk-Adjusted Performance

Very Weak

Over the last 90 days ConocoPhillips has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ConocoPhillips is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hospital Mater and ConocoPhillips

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

The idea behind Hospital Mater Dei and ConocoPhillips 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.