Correlation Between FIDSON HEALTHCARE and CONSOLIDATED HALLMARK

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

By analyzing existing cross correlation between FIDSON HEALTHCARE PLC and CONSOLIDATED HALLMARK INSURANCE, you can compare the effects of market volatilities on FIDSON HEALTHCARE and CONSOLIDATED HALLMARK 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 FIDSON HEALTHCARE with a short position of CONSOLIDATED HALLMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIDSON HEALTHCARE and CONSOLIDATED HALLMARK.

Diversification Opportunities for FIDSON HEALTHCARE and CONSOLIDATED HALLMARK

0.05

Correlation Coefficient

FIDSON HEALTHCARE  CONSOLIDATED HALLMARK

Significant diversification

The 3 months correlation between FIDSON and CONSOLIDATED is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding FIDSON HEALTHCARE PLC and CONSOLIDATED HALLMARK INSURANC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED HALLMARK and FIDSON 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 FIDSON HEALTHCARE PLC are associated (or correlated) with CONSOLIDATED HALLMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED HALLMARK has no effect on the direction of FIDSON HEALTHCARE i.e., FIDSON HEALTHCARE and CONSOLIDATED HALLMARK go up and down completely randomly.

Pair Corralation between FIDSON HEALTHCARE and CONSOLIDATED HALLMARK

Assuming the 90 days trading horizon FIDSON HEALTHCARE is expected to generate 2.35 times less return on investment than CONSOLIDATED HALLMARK. But when comparing it to its historical volatility, FIDSON HEALTHCARE PLC is 1.43 times less risky than CONSOLIDATED HALLMARK. It trades about 0.1 of its potential returns per unit of risk. CONSOLIDATED HALLMARK INSURANCE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  142.00  in CONSOLIDATED HALLMARK INSURANCE on September 4, 2024 and sell it today you would earn a total of  73.00  from holding CONSOLIDATED HALLMARK INSURANCE or generate 51.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

FIDSON HEALTHCARE PLC  vs.  CONSOLIDATED HALLMARK INSURANC

FIDSON HEALTHCARE PLC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIDSON HEALTHCARE PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, FIDSON HEALTHCARE sustained solid returns over the last few months and may actually be approaching a breakup point.

CONSOLIDATED HALLMARK

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED HALLMARK INSURANCE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, CONSOLIDATED HALLMARK disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIDSON HEALTHCARE and CONSOLIDATED HALLMARK

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

The idea behind FIDSON HEALTHCARE PLC and CONSOLIDATED HALLMARK INSURANCE 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.