Correlation Between DC HEALTHCARE and Scientex Packaging

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

By analyzing existing cross correlation between DC HEALTHCARE HOLDINGS and Scientex Packaging, you can compare the effects of market volatilities on DC HEALTHCARE and Scientex Packaging 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 DC HEALTHCARE with a short position of Scientex Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Scientex Packaging.

Diversification Opportunities for DC HEALTHCARE and Scientex Packaging

-0.31

Correlation Coefficient

DC HEALTHCARE  Scientex Packaging

Very good diversification

The 3 months correlation between 0283 and Scientex is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Scientex Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientex Packaging and DC 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 DC HEALTHCARE HOLDINGS are associated (or correlated) with Scientex Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientex Packaging has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Scientex Packaging go up and down completely randomly.

Pair Corralation between DC HEALTHCARE and Scientex Packaging

Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to under-perform the Scientex Packaging. In addition to that, DC HEALTHCARE is 1.26 times more volatile than Scientex Packaging. It trades about -0.21 of its total potential returns per unit of risk. Scientex Packaging is currently generating about -0.11 per unit of volatility. If you would invest  189.00  in Scientex Packaging on October 26, 2024 and sell it today you would lose (9.00) from holding Scientex Packaging or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

DC HEALTHCARE HOLDINGS  vs.  Scientex Packaging

DC HEALTHCARE HOLDINGS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DC HEALTHCARE HOLDINGS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, DC HEALTHCARE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Scientex Packaging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scientex Packaging has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with DC HEALTHCARE and Scientex Packaging

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

The idea behind DC HEALTHCARE HOLDINGS and Scientex Packaging 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.