Correlation Between Hathway Cable and Fortis Healthcare

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

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

Diversification Opportunities for Hathway Cable and Fortis Healthcare

-0.72

Correlation Coefficient

Hathway Cable  Fortis Healthcare

Pay attention - limited upside

The 3 months correlation between Hathway and Fortis is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hathway Cable Datacom and Fortis Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Healthcare and Hathway Cable 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 Hathway Cable Datacom are associated (or correlated) with Fortis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Healthcare has no effect on the direction of Hathway Cable i.e., Hathway Cable and Fortis Healthcare go up and down completely randomly.

Pair Corralation between Hathway Cable and Fortis Healthcare

Assuming the 90 days trading horizon Hathway Cable Datacom is expected to under-perform the Fortis Healthcare. In addition to that, Hathway Cable is 1.11 times more volatile than Fortis Healthcare Limited. It trades about -0.24 of its total potential returns per unit of risk. Fortis Healthcare Limited is currently generating about -0.04 per unit of volatility. If you would invest  69,785  in Fortis Healthcare Limited on September 26, 2024 and sell it today you would lose (1,505) from holding Fortis Healthcare Limited or give up 2.16% of portfolio value over 90 days.

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

Hathway Cable Datacom  vs.  Fortis Healthcare Limited

Hathway Cable Datacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hathway Cable Datacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Fortis Healthcare

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Hathway Cable and Fortis Healthcare

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

The idea behind Hathway Cable Datacom and Fortis Healthcare Limited 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.