Correlation Between JD HEALTH and Garofalo Health

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

By analyzing existing cross correlation between JD HEALTH INTL and Garofalo Health Care, you can compare the effects of market volatilities on JD HEALTH and Garofalo 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 JD HEALTH with a short position of Garofalo Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD HEALTH and Garofalo Health.

Diversification Opportunities for JD HEALTH and Garofalo Health

-0.43

Correlation Coefficient

JD HEALTH  Garofalo Health

Very good diversification

The 3 months correlation between 8ZN and Garofalo is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JD HEALTH INTL and Garofalo Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garofalo Health Care and JD HEALTH 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 JD HEALTH INTL are associated (or correlated) with Garofalo Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garofalo Health Care has no effect on the direction of JD HEALTH i.e., JD HEALTH and Garofalo Health go up and down completely randomly.

Pair Corralation between JD HEALTH and Garofalo Health

Assuming the 90 days horizon JD HEALTH INTL is expected to generate 1.92 times more return on investment than Garofalo Health. However, JD HEALTH is 1.92 times more volatile than Garofalo Health Care. It trades about -0.01 of its potential returns per unit of risk. Garofalo Health Care is currently generating about -0.05 per unit of risk. If you would invest  334.00  in JD HEALTH INTL on October 6, 2024 and sell it today you would lose (8.00) from holding JD HEALTH INTL or give up 2.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

JD HEALTH INTL  vs.  Garofalo Health Care

JD HEALTH INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD HEALTH INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Garofalo Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JD HEALTH and Garofalo Health

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

The idea behind JD HEALTH INTL and Garofalo Health Care 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.