Correlation Between By Health and RoadMain T

Can any of the company-specific risk be diversified away by investing in both By Health and RoadMain T 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 By Health and RoadMain T into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between By health and RoadMain T Co, you can compare the effects of market volatilities on By Health and RoadMain T 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 By Health with a short position of RoadMain T. Check out your portfolio center. Please also check ongoing floating volatility patterns of By Health and RoadMain T.

Diversification Opportunities for By Health and RoadMain T

0.72

Correlation Coefficient

By Health  RoadMain T

Poor diversification

The 3 months correlation between 300146 and RoadMain is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding By health and RoadMain T Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RoadMain T and By Health 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 By health are associated (or correlated) with RoadMain T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RoadMain T has no effect on the direction of By Health i.e., By Health and RoadMain T go up and down completely randomly.

Pair Corralation between By Health and RoadMain T

Assuming the 90 days trading horizon By health is expected to generate 1.14 times more return on investment than RoadMain T. However, By Health is 1.14 times more volatile than RoadMain T Co. It trades about -0.05 of its potential returns per unit of risk. RoadMain T Co is currently generating about -0.13 per unit of risk. If you would invest  1,357  in By health on September 13, 2024 and sell it today you would lose (29.00) from holding By health or give up 2.14% of portfolio value over 90 days.

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

By health  vs.  RoadMain T Co

By health

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in By health are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, By Health sustained solid returns over the last few months and may actually be approaching a breakup point.

RoadMain T

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RoadMain T Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, RoadMain T sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with By Health and RoadMain T

The main advantage of trading using opposite By Health and RoadMain T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if By Health position performs unexpectedly, RoadMain T 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 RoadMain T will offset losses from the drop in RoadMain T's long position.

The idea behind By health and RoadMain T Co 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.