Correlation Between Fisher Paykel and Global Health

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

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

Diversification Opportunities for Fisher Paykel and Global Health

-0.09

Correlation Coefficient

Fisher Paykel  Global Health

Good diversification

The 3 months correlation between Fisher and Global is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health and Fisher Paykel 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 Fisher Paykel Healthcare are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and Global Health go up and down completely randomly.

Pair Corralation between Fisher Paykel and Global Health

Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to under-perform the Global Health. But the stock apears to be less risky and, when comparing its historical volatility, Fisher Paykel Healthcare is 1.87 times less risky than Global Health. The stock trades about -0.13 of its potential returns per unit of risk. The Global Health is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Global Health on December 1, 2024 and sell it today you would lose (1.00) from holding Global Health or give up 7.14% of portfolio value over 90 days.

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

Fisher Paykel Healthcare  vs.  Global Health

Fisher Paykel Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fisher Paykel Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Global Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Global Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fisher Paykel and Global Health

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

The idea behind Fisher Paykel Healthcare and Global Health 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.