Correlation Between Fortis Healthcare and Gokul Refoils

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

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

Diversification Opportunities for Fortis Healthcare and Gokul Refoils

0.67

Correlation Coefficient

Fortis Healthcare  Gokul Refoils

Poor diversification

The 3 months correlation between Fortis and Gokul is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fortis Healthcare Limited and Gokul Refoils and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gokul Refoils and Fortis 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 Fortis Healthcare Limited are associated (or correlated) with Gokul Refoils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gokul Refoils has no effect on the direction of Fortis Healthcare i.e., Fortis Healthcare and Gokul Refoils go up and down completely randomly.

Pair Corralation between Fortis Healthcare and Gokul Refoils

Assuming the 90 days trading horizon Fortis Healthcare Limited is expected to generate 1.0 times more return on investment than Gokul Refoils. However, Fortis Healthcare Limited is 1.0 times less risky than Gokul Refoils. It trades about 0.2 of its potential returns per unit of risk. Gokul Refoils and is currently generating about -0.02 per unit of risk. If you would invest  62,165  in Fortis Healthcare Limited on October 7, 2024 and sell it today you would earn a total of  11,040  from holding Fortis Healthcare Limited or generate 17.76% return on investment over 90 days.

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

Fortis Healthcare Limited  vs.  Gokul Refoils and

Fortis Healthcare

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortis Healthcare Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Fortis Healthcare sustained solid returns over the last few months and may actually be approaching a breakup point.

Gokul Refoils

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fortis Healthcare and Gokul Refoils

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

The idea behind Fortis Healthcare Limited and Gokul Refoils and 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.