Correlation Between Grande Asset and Aikchol Hospital

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

By analyzing existing cross correlation between Grande Asset Hotels and Aikchol Hospital Public, you can compare the effects of market volatilities on Grande Asset and Aikchol Hospital 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 Grande Asset with a short position of Aikchol Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Asset and Aikchol Hospital.

Diversification Opportunities for Grande Asset and Aikchol Hospital

0.32

Correlation Coefficient

Grande Asset  Aikchol Hospital

Weak diversification

The 3 months correlation between Grande and Aikchol is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grande Asset Hotels and Aikchol Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aikchol Hospital Public and Grande Asset 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 Grande Asset Hotels are associated (or correlated) with Aikchol Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aikchol Hospital Public has no effect on the direction of Grande Asset i.e., Grande Asset and Aikchol Hospital go up and down completely randomly.

Pair Corralation between Grande Asset and Aikchol Hospital

Assuming the 90 days trading horizon Grande Asset Hotels is expected to generate 3.86 times more return on investment than Aikchol Hospital. However, Grande Asset is 3.86 times more volatile than Aikchol Hospital Public. It trades about 0.0 of its potential returns per unit of risk. Aikchol Hospital Public is currently generating about -0.04 per unit of risk. If you would invest  8.00  in Grande Asset Hotels on December 4, 2024 and sell it today you would lose (3.00) from holding Grande Asset Hotels or give up 37.5% of portfolio value over 90 days.

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

Grande Asset Hotels  vs.  Aikchol Hospital Public

Grande Asset Hotels

Risk-Adjusted Performance

Very Weak

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

Aikchol Hospital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aikchol Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Grande Asset and Aikchol Hospital

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

The idea behind Grande Asset Hotels and Aikchol Hospital Public 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.