Correlation Between SS Healthcare and Genovate Biotechnology

Can any of the company-specific risk be diversified away by investing in both SS Healthcare and Genovate Biotechnology 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 SS Healthcare and Genovate Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SS Healthcare Holding and Genovate Biotechnology Co, you can compare the effects of market volatilities on SS Healthcare and Genovate Biotechnology 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 SS Healthcare with a short position of Genovate Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS Healthcare and Genovate Biotechnology.

Diversification Opportunities for SS Healthcare and Genovate Biotechnology

0.2

Correlation Coefficient

SS Healthcare  Genovate Biotechnology

Modest diversification

The 3 months correlation between 4198 and Genovate is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SS Healthcare Holding and Genovate Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovate Biotechnology and SS 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 SS Healthcare Holding are associated (or correlated) with Genovate Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovate Biotechnology has no effect on the direction of SS Healthcare i.e., SS Healthcare and Genovate Biotechnology go up and down completely randomly.

Pair Corralation between SS Healthcare and Genovate Biotechnology

Assuming the 90 days trading horizon SS Healthcare is expected to generate 18.65 times less return on investment than Genovate Biotechnology. In addition to that, SS Healthcare is 1.05 times more volatile than Genovate Biotechnology Co. It trades about 0.02 of its total potential returns per unit of risk. Genovate Biotechnology Co is currently generating about 0.32 per unit of volatility. If you would invest  2,090  in Genovate Biotechnology Co on October 20, 2024 and sell it today you would earn a total of  430.00  from holding Genovate Biotechnology Co or generate 20.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

SS Healthcare Holding  vs.  Genovate Biotechnology Co

SS Healthcare Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SS Healthcare Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SS Healthcare is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Genovate Biotechnology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genovate Biotechnology Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Genovate Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SS Healthcare and Genovate Biotechnology

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

The idea behind SS Healthcare Holding and Genovate Biotechnology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.