Correlation Between SS Healthcare and Golden Biotechnology

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

Diversification Opportunities for SS Healthcare and Golden Biotechnology

0.35

Correlation Coefficient

SS Healthcare  Golden Biotechnology

Weak diversification

The 3 months correlation between 4198 and Golden is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SS Healthcare Holding and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden 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 Golden Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Biotechnology has no effect on the direction of SS Healthcare i.e., SS Healthcare and Golden Biotechnology go up and down completely randomly.

Pair Corralation between SS Healthcare and Golden Biotechnology

If you would invest  3,150  in SS Healthcare Holding on October 20, 2024 and sell it today you would earn a total of  5.00  from holding SS Healthcare Holding or generate 0.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

SS Healthcare Holding  vs.  Golden Biotechnology

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.

Golden Biotechnology

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Golden Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Golden Biotechnology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SS Healthcare and Golden Biotechnology

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

The idea behind SS Healthcare Holding and Golden Biotechnology 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.