Correlation Between Colombo Investment and Asiri Surgical

Can any of the company-specific risk be diversified away by investing in both Colombo Investment and Asiri Surgical 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 Colombo Investment and Asiri Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Colombo Investment Trust and Asiri Surgical Hospital, you can compare the effects of market volatilities on Colombo Investment and Asiri Surgical 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 Colombo Investment with a short position of Asiri Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colombo Investment and Asiri Surgical.

Diversification Opportunities for Colombo Investment and Asiri Surgical

-0.3

Correlation Coefficient

Colombo Investment  Asiri Surgical

Very good diversification

The 3 months correlation between Colombo and Asiri is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Colombo Investment Trust and Asiri Surgical Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiri Surgical Hospital and Colombo Investment 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 Colombo Investment Trust are associated (or correlated) with Asiri Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiri Surgical Hospital has no effect on the direction of Colombo Investment i.e., Colombo Investment and Asiri Surgical go up and down completely randomly.

Pair Corralation between Colombo Investment and Asiri Surgical

Assuming the 90 days trading horizon Colombo Investment Trust is expected to under-perform the Asiri Surgical. In addition to that, Colombo Investment is 2.16 times more volatile than Asiri Surgical Hospital. It trades about 0.0 of its total potential returns per unit of risk. Asiri Surgical Hospital is currently generating about -0.01 per unit of volatility. If you would invest  1,250  in Asiri Surgical Hospital on September 25, 2024 and sell it today you would lose (160.00) from holding Asiri Surgical Hospital or give up 12.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.04%
Values	Daily Returns

Colombo Investment Trust  vs.  Asiri Surgical Hospital

Colombo Investment Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Colombo Investment Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Colombo Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Asiri Surgical Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asiri Surgical Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Asiri Surgical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Colombo Investment and Asiri Surgical

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

The idea behind Colombo Investment Trust and Asiri Surgical Hospital 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.