Correlation Between Pacific Hospital and Senao International

Can any of the company-specific risk be diversified away by investing in both Pacific Hospital and Senao International 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 Pacific Hospital and Senao International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pacific Hospital Supply and Senao International Co, you can compare the effects of market volatilities on Pacific Hospital and Senao International 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 Pacific Hospital with a short position of Senao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Hospital and Senao International.

Diversification Opportunities for Pacific Hospital and Senao International

-0.9

Correlation Coefficient

Pacific Hospital  Senao International

Pay attention - limited upside

The 3 months correlation between Pacific and Senao is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Hospital Supply and Senao International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao International and Pacific Hospital 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 Pacific Hospital Supply are associated (or correlated) with Senao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao International has no effect on the direction of Pacific Hospital i.e., Pacific Hospital and Senao International go up and down completely randomly.

Pair Corralation between Pacific Hospital and Senao International

Assuming the 90 days trading horizon Pacific Hospital Supply is expected to generate 0.93 times more return on investment than Senao International. However, Pacific Hospital Supply is 1.07 times less risky than Senao International. It trades about 0.19 of its potential returns per unit of risk. Senao International Co is currently generating about -0.16 per unit of risk. If you would invest  8,760  in Pacific Hospital Supply on October 9, 2024 and sell it today you would earn a total of  750.00  from holding Pacific Hospital Supply or generate 8.56% return on investment over 90 days.

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

Pacific Hospital Supply  vs.  Senao International Co

Pacific Hospital Supply

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Hospital Supply are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Pacific Hospital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Senao International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senao International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Pacific Hospital and Senao International

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

The idea behind Pacific Hospital Supply and Senao International 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.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.