Correlation Between Coor Service and SHIP HEALTHCARE

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

By analyzing existing cross correlation between Coor Service Management and SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Coor Service and SHIP 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 Coor Service with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and SHIP HEALTHCARE.

Diversification Opportunities for Coor Service and SHIP HEALTHCARE

0.67

Correlation Coefficient

Coor Service  SHIP HEALTHCARE

Poor diversification

The 3 months correlation between Coor and SHIP is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and Coor Service 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 Coor Service Management are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Coor Service i.e., Coor Service and SHIP HEALTHCARE go up and down completely randomly.

Pair Corralation between Coor Service and SHIP HEALTHCARE

Assuming the 90 days horizon Coor Service Management is expected to under-perform the SHIP HEALTHCARE. In addition to that, Coor Service is 1.3 times more volatile than SHIP HEALTHCARE HLDGINC. It trades about -0.05 of its total potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about 0.02 per unit of volatility. If you would invest  1,310  in SHIP HEALTHCARE HLDGINC on September 13, 2024 and sell it today you would earn a total of  30.00  from holding SHIP HEALTHCARE HLDGINC or generate 2.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Coor Service Management  vs.  SHIP HEALTHCARE HLDGINC

Coor Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coor Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SHIP HEALTHCARE HLDGINC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SHIP HEALTHCARE HLDGINC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SHIP HEALTHCARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Coor Service and SHIP HEALTHCARE

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

The idea behind Coor Service Management and SHIP HEALTHCARE HLDGINC 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.