Correlation Between Capital Properties and ResMed
Can any of the company-specific risk be diversified away by investing in both Capital Properties and ResMed 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 Capital Properties and ResMed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Properties and ResMed Inc, you can compare the effects of market volatilities on Capital Properties and ResMed 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 Capital Properties with a short position of ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Properties and ResMed.
Diversification Opportunities for Capital Properties and ResMed
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and ResMed is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Capital Properties and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc and Capital Properties 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 Capital Properties are associated (or correlated) with ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of Capital Properties i.e., Capital Properties and ResMed go up and down completely randomly.
Pair Corralation between Capital Properties and ResMed
Given the investment horizon of 90 days Capital Properties is expected to generate 0.88 times more return on investment than ResMed. However, Capital Properties is 1.14 times less risky than ResMed. It trades about 0.01 of its potential returns per unit of risk. ResMed Inc is currently generating about 0.0 per unit of risk. If you would invest 1,200 in Capital Properties on January 18, 2024 and sell it today you would earn a total of 0.00 from holding Capital Properties or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 67.68% |
Values | Daily Returns |
Capital Properties vs. ResMed Inc
Performance |
Timeline |
Capital Properties |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ResMed Inc |
Capital Properties and ResMed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capital Properties and ResMed
The main advantage of trading using opposite Capital Properties and ResMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Properties position performs unexpectedly, ResMed 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 ResMed will offset losses from the drop in ResMed's long position.Capital Properties vs. Community Bancorp | Capital Properties vs. Meritage Hospitality Group | Capital Properties vs. F M Bank | Capital Properties vs. ENB Financial Corp |
ResMed vs. The Ensign Group | ResMed vs. Select Medical Holdings | ResMed vs. Encompass Health Corp | ResMed vs. Enhabit |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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