Correlation Between MEDICAL FACILITIES and Event Hospitality

Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and Event Hospitality 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 MEDICAL FACILITIES and Event Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Event Hospitality and, you can compare the effects of market volatilities on MEDICAL FACILITIES and Event Hospitality 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 MEDICAL FACILITIES with a short position of Event Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Event Hospitality.

Diversification Opportunities for MEDICAL FACILITIES and Event Hospitality

0.72

Correlation Coefficient

MEDICAL FACILITIES  Event Hospitality

Poor diversification

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

Pair Corralation between MEDICAL FACILITIES and Event Hospitality

Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to under-perform the Event Hospitality. In addition to that, MEDICAL FACILITIES is 1.19 times more volatile than Event Hospitality and. It trades about -0.25 of its total potential returns per unit of risk. Event Hospitality and is currently generating about -0.11 per unit of volatility. If you would invest  695.00  in Event Hospitality and on October 5, 2024 and sell it today you would lose (20.00) from holding Event Hospitality and or give up 2.88% of portfolio value over 90 days.

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

MEDICAL FACILITIES NEW  vs.  Event Hospitality and

MEDICAL FACILITIES NEW

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days MEDICAL FACILITIES NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, MEDICAL FACILITIES reported solid returns over the last few months and may actually be approaching a breakup point.

Event Hospitality

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Event Hospitality and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Event Hospitality is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MEDICAL FACILITIES and Event Hospitality

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

The idea behind MEDICAL FACILITIES NEW and Event Hospitality and 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.