Correlation Between MEDICAL FACILITIES and FISH PAYK

Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and FISH PAYK 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 FISH PAYK 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 FISH PAYK HEALTH, you can compare the effects of market volatilities on MEDICAL FACILITIES and FISH PAYK 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 FISH PAYK. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and FISH PAYK.

Diversification Opportunities for MEDICAL FACILITIES and FISH PAYK

0.32

Correlation Coefficient

MEDICAL FACILITIES  FISH PAYK

Weak diversification

The 3 months correlation between MEDICAL and FISH is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and FISH PAYK HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FISH PAYK HEALTH 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 FISH PAYK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FISH PAYK HEALTH has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and FISH PAYK go up and down completely randomly.

Pair Corralation between MEDICAL FACILITIES and FISH PAYK

Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to generate 1.24 times more return on investment than FISH PAYK. However, MEDICAL FACILITIES is 1.24 times more volatile than FISH PAYK HEALTH. It trades about 0.26 of its potential returns per unit of risk. FISH PAYK HEALTH is currently generating about 0.15 per unit of risk. If you would invest  950.00  in MEDICAL FACILITIES NEW on September 2, 2024 and sell it today you would earn a total of  140.00  from holding MEDICAL FACILITIES NEW or generate 14.74% return on investment over 90 days.

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

MEDICAL FACILITIES NEW  vs.  FISH PAYK HEALTH

MEDICAL FACILITIES NEW

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MEDICAL FACILITIES NEW are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MEDICAL FACILITIES reported solid returns over the last few months and may actually be approaching a breakup point.

FISH PAYK HEALTH

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FISH PAYK HEALTH are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, FISH PAYK is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MEDICAL FACILITIES and FISH PAYK

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

The idea behind MEDICAL FACILITIES NEW and FISH PAYK HEALTH 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.