Correlation Between SS Healthcare and Century Iron

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

Diversification Opportunities for SS Healthcare and Century Iron

0.23

Correlation Coefficient

SS Healthcare  Century Iron

Modest diversification

The 3 months correlation between 4198 and Century is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SS Healthcare Holding and Century Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Iron And 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 Century Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Iron And has no effect on the direction of SS Healthcare i.e., SS Healthcare and Century Iron go up and down completely randomly.

Pair Corralation between SS Healthcare and Century Iron

Assuming the 90 days trading horizon SS Healthcare is expected to generate 2.19 times less return on investment than Century Iron. But when comparing it to its historical volatility, SS Healthcare Holding is 1.0 times less risky than Century Iron. It trades about 0.03 of its potential returns per unit of risk. Century Iron And is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  9,080  in Century Iron And on September 19, 2024 and sell it today you would earn a total of  8,920  from holding Century Iron And or generate 98.24% return on investment over 90 days.

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

SS Healthcare Holding  vs.  Century Iron And

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.

Century Iron And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Century Iron And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with SS Healthcare and Century Iron

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

The idea behind SS Healthcare Holding and Century Iron 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..