Correlation Between Alexandria New and Housing Development

Can any of the company-specific risk be diversified away by investing in both Alexandria New and Housing Development 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 Alexandria New and Housing Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alexandria New Medical and Housing Development Bank, you can compare the effects of market volatilities on Alexandria New and Housing Development 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 Alexandria New with a short position of Housing Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria New and Housing Development.

Diversification Opportunities for Alexandria New and Housing Development

-0.23

Correlation Coefficient

Alexandria New  Housing Development

Very good diversification

The 3 months correlation between Alexandria and Housing is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria New Medical and Housing Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Housing Development Bank and Alexandria New 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 Alexandria New Medical are associated (or correlated) with Housing Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Housing Development Bank has no effect on the direction of Alexandria New i.e., Alexandria New and Housing Development go up and down completely randomly.

Pair Corralation between Alexandria New and Housing Development

Assuming the 90 days trading horizon Alexandria New Medical is expected to under-perform the Housing Development. In addition to that, Alexandria New is 1.61 times more volatile than Housing Development Bank. It trades about -0.16 of its total potential returns per unit of risk. Housing Development Bank is currently generating about 0.08 per unit of volatility. If you would invest  5,333  in Housing Development Bank on December 25, 2024 and sell it today you would earn a total of  199.00  from holding Housing Development Bank or generate 3.73% return on investment over 90 days.

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

Alexandria New Medical  vs.  Housing Development Bank

Alexandria New Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alexandria New Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Housing Development Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Housing Development Bank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Housing Development is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alexandria New and Housing Development

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

The idea behind Alexandria New Medical and Housing Development Bank 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.