Correlation Between Garofalo Health and ANDREW PELLER

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

By analyzing existing cross correlation between Garofalo Health Care and ANDREW PELLER LTD, you can compare the effects of market volatilities on Garofalo Health and ANDREW PELLER 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 Garofalo Health with a short position of ANDREW PELLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garofalo Health and ANDREW PELLER.

Diversification Opportunities for Garofalo Health and ANDREW PELLER

-0.58

Correlation Coefficient

Garofalo Health  ANDREW PELLER

Excellent diversification

The 3 months correlation between Garofalo and ANDREW is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Garofalo Health Care and ANDREW PELLER LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANDREW PELLER LTD and Garofalo Health 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 Garofalo Health Care are associated (or correlated) with ANDREW PELLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANDREW PELLER LTD has no effect on the direction of Garofalo Health i.e., Garofalo Health and ANDREW PELLER go up and down completely randomly.

Pair Corralation between Garofalo Health and ANDREW PELLER

Assuming the 90 days horizon Garofalo Health Care is expected to under-perform the ANDREW PELLER. But the stock apears to be less risky and, when comparing its historical volatility, Garofalo Health Care is 2.1 times less risky than ANDREW PELLER. The stock trades about -0.09 of its potential returns per unit of risk. The ANDREW PELLER LTD is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  260.00  in ANDREW PELLER LTD on December 20, 2024 and sell it today you would earn a total of  38.00  from holding ANDREW PELLER LTD or generate 14.62% return on investment over 90 days.

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

Garofalo Health Care  vs.  ANDREW PELLER LTD

Garofalo Health Care

Risk-Adjusted Performance

Very Weak

Over the last 90 days Garofalo Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ANDREW PELLER LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANDREW PELLER LTD are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ANDREW PELLER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garofalo Health and ANDREW PELLER

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

The idea behind Garofalo Health Care and ANDREW PELLER LTD 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.