Correlation Between AVALON TECHNOLOGIES and Yatharth Hospital

Can any of the company-specific risk be diversified away by investing in both AVALON TECHNOLOGIES and Yatharth Hospital 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 AVALON TECHNOLOGIES and Yatharth Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AVALON TECHNOLOGIES LTD and Yatharth Hospital Trauma, you can compare the effects of market volatilities on AVALON TECHNOLOGIES and Yatharth Hospital 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 AVALON TECHNOLOGIES with a short position of Yatharth Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVALON TECHNOLOGIES and Yatharth Hospital.

Diversification Opportunities for AVALON TECHNOLOGIES and Yatharth Hospital

-0.54

Correlation Coefficient

AVALON TECHNOLOGIES  Yatharth Hospital

Excellent diversification

The 3 months correlation between AVALON and Yatharth is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AVALON TECHNOLOGIES LTD and Yatharth Hospital Trauma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatharth Hospital Trauma and AVALON TECHNOLOGIES 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 AVALON TECHNOLOGIES LTD are associated (or correlated) with Yatharth Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatharth Hospital Trauma has no effect on the direction of AVALON TECHNOLOGIES i.e., AVALON TECHNOLOGIES and Yatharth Hospital go up and down completely randomly.

Pair Corralation between AVALON TECHNOLOGIES and Yatharth Hospital

Assuming the 90 days trading horizon AVALON TECHNOLOGIES LTD is expected to generate 1.14 times more return on investment than Yatharth Hospital. However, AVALON TECHNOLOGIES is 1.14 times more volatile than Yatharth Hospital Trauma. It trades about 0.08 of its potential returns per unit of risk. Yatharth Hospital Trauma is currently generating about 0.07 per unit of risk. If you would invest  39,800  in AVALON TECHNOLOGIES LTD on October 10, 2024 and sell it today you would earn a total of  54,965  from holding AVALON TECHNOLOGIES LTD or generate 138.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	81.78%
Values	Daily Returns

AVALON TECHNOLOGIES LTD  vs.  Yatharth Hospital Trauma

AVALON TECHNOLOGIES LTD

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AVALON TECHNOLOGIES LTD are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, AVALON TECHNOLOGIES sustained solid returns over the last few months and may actually be approaching a breakup point.

Yatharth Hospital Trauma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yatharth Hospital Trauma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Yatharth Hospital is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AVALON TECHNOLOGIES and Yatharth Hospital

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

The idea behind AVALON TECHNOLOGIES LTD and Yatharth Hospital Trauma 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 Commodity Directory module to find actively traded commodities issued by global exchanges.