Correlation Between SHIP HEALTHCARE and FISH PAYK

Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and FISH PAYK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and FISH PAYK HEALTH, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of FISH PAYK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and FISH PAYK.

Diversification Opportunities for SHIP HEALTHCARE and FISH PAYK

-0.42

Correlation Coefficient

SHIP HEALTHCARE  FISH PAYK

Very good diversification

The 3 months correlation between SHIP and FISH is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and FISH PAYK go up and down completely randomly.

Pair Corralation between SHIP HEALTHCARE and FISH PAYK

Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to under-perform the FISH PAYK. But the stock apears to be less risky and, when comparing its historical volatility, SHIP HEALTHCARE HLDGINC is 1.28 times less risky than FISH PAYK. The stock trades about -0.02 of its potential returns per unit of risk. The FISH PAYK HEALTH is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,002  in FISH PAYK HEALTH on October 6, 2024 and sell it today you would earn a total of  58.00  from holding FISH PAYK HEALTH or generate 2.9% return on investment over 90 days.

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

SHIP HEALTHCARE HLDGINC  vs.  FISH PAYK HEALTH

SHIP HEALTHCARE HLDGINC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHIP HEALTHCARE HLDGINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SHIP HEALTHCARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FISH PAYK HEALTH

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FISH PAYK HEALTH are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, FISH PAYK may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SHIP HEALTHCARE and FISH PAYK

The main advantage of trading using opposite SHIP HEALTHCARE and FISH PAYK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.