Correlation Between Embassy Office and Yatharth Hospital

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

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

Diversification Opportunities for Embassy Office and Yatharth Hospital

0.49

Correlation Coefficient

Embassy Office  Yatharth Hospital

Very weak diversification

The 3 months correlation between Embassy and Yatharth is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Embassy Office Parks 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 Embassy Office 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 Embassy Office Parks 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 Embassy Office i.e., Embassy Office and Yatharth Hospital go up and down completely randomly.

Pair Corralation between Embassy Office and Yatharth Hospital

Assuming the 90 days trading horizon Embassy Office Parks is expected to generate 0.57 times more return on investment than Yatharth Hospital. However, Embassy Office Parks is 1.76 times less risky than Yatharth Hospital. It trades about -0.08 of its potential returns per unit of risk. Yatharth Hospital Trauma is currently generating about -0.26 per unit of risk. If you would invest  39,300  in Embassy Office Parks on October 27, 2024 and sell it today you would lose (2,827) from holding Embassy Office Parks or give up 7.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Embassy Office Parks  vs.  Yatharth Hospital Trauma

Embassy Office Parks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Embassy Office Parks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Embassy Office and Yatharth Hospital

The main advantage of trading using opposite Embassy Office and Yatharth Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embassy Office 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 Embassy Office Parks 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.