Correlation Between Gemdale Corp and Andon Health

Can any of the company-specific risk be diversified away by investing in both Gemdale Corp and Andon Health 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 Gemdale Corp and Andon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gemdale Corp and Andon Health Co, you can compare the effects of market volatilities on Gemdale Corp and Andon Health 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 Gemdale Corp with a short position of Andon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemdale Corp and Andon Health.

Diversification Opportunities for Gemdale Corp and Andon Health

0.74

Correlation Coefficient

Gemdale Corp  Andon Health

Poor diversification

The 3 months correlation between Gemdale and Andon is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gemdale Corp and Andon Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andon Health and Gemdale Corp 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 Gemdale Corp are associated (or correlated) with Andon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andon Health has no effect on the direction of Gemdale Corp i.e., Gemdale Corp and Andon Health go up and down completely randomly.

Pair Corralation between Gemdale Corp and Andon Health

Assuming the 90 days trading horizon Gemdale Corp is expected to under-perform the Andon Health. In addition to that, Gemdale Corp is 1.48 times more volatile than Andon Health Co. It trades about -0.04 of its total potential returns per unit of risk. Andon Health Co is currently generating about 0.0 per unit of volatility. If you would invest  4,657  in Andon Health Co on October 10, 2024 and sell it today you would lose (599.00) from holding Andon Health Co or give up 12.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Gemdale Corp  vs.  Andon Health Co

Gemdale Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gemdale Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Andon Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Andon Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Andon Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gemdale Corp and Andon Health

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

The idea behind Gemdale Corp and Andon Health 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.