Correlation Between Worldwide Healthcare and General American
Can any of the company-specific risk be diversified away by investing in both Worldwide Healthcare and General American 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 Worldwide Healthcare and General American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldwide Healthcare Trust and General American Investors, you can compare the effects of market volatilities on Worldwide Healthcare and General American 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 Worldwide Healthcare with a short position of General American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldwide Healthcare and General American.
Diversification Opportunities for Worldwide Healthcare and General American
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Worldwide and General is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Worldwide Healthcare Trust and General American Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General American Inv and Worldwide 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 Worldwide Healthcare Trust are associated (or correlated) with General American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General American Inv has no effect on the direction of Worldwide Healthcare i.e., Worldwide Healthcare and General American go up and down completely randomly.
Pair Corralation between Worldwide Healthcare and General American
Assuming the 90 days trading horizon Worldwide Healthcare Trust is expected to generate 1.66 times more return on investment than General American. However, Worldwide Healthcare is 1.66 times more volatile than General American Investors. It trades about 0.23 of its potential returns per unit of risk. General American Investors is currently generating about 0.23 per unit of risk. If you would invest 33,990 in Worldwide Healthcare Trust on September 5, 2025 and sell it today you would earn a total of 4,760 from holding Worldwide Healthcare Trust or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldwide Healthcare Trust vs. General American Investors
Performance |
| Timeline |
| Worldwide Healthcare |
| General American Inv |
Worldwide Healthcare and General American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldwide Healthcare and General American
The main advantage of trading using opposite Worldwide Healthcare and General American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldwide Healthcare position performs unexpectedly, General American 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 General American will offset losses from the drop in General American's long position.| Worldwide Healthcare vs. Temple Bar Investment | Worldwide Healthcare vs. EJF Investments | Worldwide Healthcare vs. Central Asia Metals | Worldwide Healthcare vs. Europa Metals |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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