Correlation Between Entero Healthcare and Sakar Healthcare

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

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

Diversification Opportunities for Entero Healthcare and Sakar Healthcare

0.68

Correlation Coefficient

Entero Healthcare  Sakar Healthcare

Poor diversification

The 3 months correlation between Entero and Sakar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Entero Healthcare Solutions and Sakar Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sakar Healthcare and Entero Healthcare 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 Entero Healthcare Solutions are associated (or correlated) with Sakar Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sakar Healthcare has no effect on the direction of Entero Healthcare i.e., Entero Healthcare and Sakar Healthcare go up and down completely randomly.

Pair Corralation between Entero Healthcare and Sakar Healthcare

Assuming the 90 days trading horizon Entero Healthcare Solutions is expected to generate 0.9 times more return on investment than Sakar Healthcare. However, Entero Healthcare Solutions is 1.11 times less risky than Sakar Healthcare. It trades about -0.04 of its potential returns per unit of risk. Sakar Healthcare Limited is currently generating about -0.14 per unit of risk. If you would invest  135,425  in Entero Healthcare Solutions on December 1, 2024 and sell it today you would lose (8,940) from holding Entero Healthcare Solutions or give up 6.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Entero Healthcare Solutions  vs.  Sakar Healthcare Limited

Entero Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entero Healthcare Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Entero Healthcare is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sakar Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sakar Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Entero Healthcare and Sakar Healthcare

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

The idea behind Entero Healthcare Solutions and Sakar Healthcare Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.