Correlation Between Elite Pharma and Rockwell Medical

Can any of the company-specific risk be diversified away by investing in both Elite Pharma and Rockwell Medical 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 Elite Pharma and Rockwell Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Elite Pharma and Rockwell Medical

0.0

Correlation Coefficient

Elite Pharma  Rockwell Medical

Pay attention - limited upside

The 3 months correlation between Elite and Rockwell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elite Pharma and Rockwell Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockwell Medical and Elite Pharma 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 Elite Pharma are associated (or correlated) with Rockwell Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockwell Medical has no effect on the direction of Elite Pharma i.e., Elite Pharma and Rockwell Medical go up and down completely randomly.

Pair Corralation between Elite Pharma and Rockwell Medical

If you would invest (100.00) in Elite Pharma on November 29, 2024 and sell it today you would earn a total of  100.00  from holding Elite Pharma or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elite Pharma  vs.  Rockwell Medical

Elite Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elite Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Elite Pharma is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Rockwell Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rockwell Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Elite Pharma and Rockwell Medical

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

The idea behind Elite Pharma and Rockwell Medical 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.