Correlation Between Healthconn Corp and Chi Hua

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

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

Diversification Opportunities for Healthconn Corp and Chi Hua

0.37

Correlation Coefficient

Healthconn Corp  Chi Hua

Weak diversification

The 3 months correlation between Healthconn and Chi is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Healthconn Corp and Chi Hua Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Hua Fitness and Healthconn 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 Healthconn Corp are associated (or correlated) with Chi Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Hua Fitness has no effect on the direction of Healthconn Corp i.e., Healthconn Corp and Chi Hua go up and down completely randomly.

Pair Corralation between Healthconn Corp and Chi Hua

Assuming the 90 days trading horizon Healthconn Corp is expected to generate 3.3 times more return on investment than Chi Hua. However, Healthconn Corp is 3.3 times more volatile than Chi Hua Fitness. It trades about -0.04 of its potential returns per unit of risk. Chi Hua Fitness is currently generating about -0.14 per unit of risk. If you would invest  2,350  in Healthconn Corp on October 20, 2024 and sell it today you would lose (240.00) from holding Healthconn Corp or give up 10.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Healthconn Corp  vs.  Chi Hua Fitness

Healthconn Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthconn Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Chi Hua Fitness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chi Hua Fitness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Healthconn Corp and Chi Hua

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

The idea behind Healthconn Corp and Chi Hua Fitness 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.