Correlation Between Azure Holding and Supurva Healthcare

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

By analyzing existing cross correlation between Azure Holding Group and Supurva Healthcare Group, you can compare the effects of market volatilities on Azure Holding and Supurva Healthcare 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 Azure Holding with a short position of Supurva Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Holding and Supurva Healthcare.

Diversification Opportunities for Azure Holding and Supurva Healthcare

-0.56

Correlation Coefficient

Azure Holding  Supurva Healthcare

Excellent diversification

The 3 months correlation between Azure and Supurva is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Supurva Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supurva Healthcare and Azure Holding 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 Azure Holding Group are associated (or correlated) with Supurva Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supurva Healthcare has no effect on the direction of Azure Holding i.e., Azure Holding and Supurva Healthcare go up and down completely randomly.

Pair Corralation between Azure Holding and Supurva Healthcare

Given the investment horizon of 90 days Azure Holding is expected to generate 14.02 times less return on investment than Supurva Healthcare. But when comparing it to its historical volatility, Azure Holding Group is 10.74 times less risky than Supurva Healthcare. It trades about 0.12 of its potential returns per unit of risk. Supurva Healthcare Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Supurva Healthcare Group on December 27, 2024 and sell it today you would lose (0.01) from holding Supurva Healthcare Group or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Azure Holding Group  vs.  Supurva Healthcare Group

Azure Holding Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Supurva Healthcare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Supurva Healthcare Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Supurva Healthcare showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Azure Holding and Supurva Healthcare

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

The idea behind Azure Holding Group and Supurva Healthcare Group 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..