Correlation Between Apollo Hospitals and Healthcare Global

Can any of the company-specific risk be diversified away by investing in both Apollo Hospitals and Healthcare Global 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 Apollo Hospitals and Healthcare Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apollo Hospitals Enterprise and Healthcare Global Enterprises, you can compare the effects of market volatilities on Apollo Hospitals and Healthcare Global 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 Apollo Hospitals with a short position of Healthcare Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Hospitals and Healthcare Global.

Diversification Opportunities for Apollo Hospitals and Healthcare Global

0.53

Correlation Coefficient

Apollo Hospitals  Healthcare Global

Very weak diversification

The 3 months correlation between Apollo and Healthcare is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Hospitals Enterprise and Healthcare Global Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Global and Apollo Hospitals 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 Apollo Hospitals Enterprise are associated (or correlated) with Healthcare Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Global has no effect on the direction of Apollo Hospitals i.e., Apollo Hospitals and Healthcare Global go up and down completely randomly.

Pair Corralation between Apollo Hospitals and Healthcare Global

Assuming the 90 days trading horizon Apollo Hospitals is expected to generate 1.35 times less return on investment than Healthcare Global. But when comparing it to its historical volatility, Apollo Hospitals Enterprise is 1.59 times less risky than Healthcare Global. It trades about 0.08 of its potential returns per unit of risk. Healthcare Global Enterprises is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  44,950  in Healthcare Global Enterprises on October 10, 2024 and sell it today you would earn a total of  3,850  from holding Healthcare Global Enterprises or generate 8.57% return on investment over 90 days.

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

Apollo Hospitals Enterprise  vs.  Healthcare Global Enterprises

Apollo Hospitals Ent

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Hospitals Enterprise are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Apollo Hospitals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Healthcare Global

Risk-Adjusted Performance

5 of 100

Insignificant

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

Pair Trading with Apollo Hospitals and Healthcare Global

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

The idea behind Apollo Hospitals Enterprise and Healthcare Global Enterprises 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.