Correlation Between De Rucci and Humanwell Healthcare

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

By analyzing existing cross correlation between De Rucci Healthy and Humanwell Healthcare Group, you can compare the effects of market volatilities on De Rucci and Humanwell 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 De Rucci with a short position of Humanwell Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Rucci and Humanwell Healthcare.

Diversification Opportunities for De Rucci and Humanwell Healthcare

0.38

Correlation Coefficient

De Rucci  Humanwell Healthcare

Weak diversification

The 3 months correlation between 001323 and Humanwell is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding De Rucci Healthy and Humanwell Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humanwell Healthcare and De Rucci 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 De Rucci Healthy are associated (or correlated) with Humanwell Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humanwell Healthcare has no effect on the direction of De Rucci i.e., De Rucci and Humanwell Healthcare go up and down completely randomly.

Pair Corralation between De Rucci and Humanwell Healthcare

Assuming the 90 days trading horizon De Rucci Healthy is expected to generate 0.67 times more return on investment than Humanwell Healthcare. However, De Rucci Healthy is 1.49 times less risky than Humanwell Healthcare. It trades about 0.06 of its potential returns per unit of risk. Humanwell Healthcare Group is currently generating about -0.16 per unit of risk. If you would invest  3,782  in De Rucci Healthy on October 10, 2024 and sell it today you would earn a total of  59.00  from holding De Rucci Healthy or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

De Rucci Healthy  vs.  Humanwell Healthcare Group

De Rucci Healthy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in De Rucci Healthy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, De Rucci sustained solid returns over the last few months and may actually be approaching a breakup point.

Humanwell Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with De Rucci and Humanwell Healthcare

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

The idea behind De Rucci Healthy and Humanwell Healthcare Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.