Correlation Between Healthcare Global and Agarwal IndustrialLimite

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

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

Diversification Opportunities for Healthcare Global and Agarwal IndustrialLimite

-0.08

Correlation Coefficient

Healthcare Global  Agarwal IndustrialLimite

Good diversification

The 3 months correlation between Healthcare and Agarwal is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Global Enterprises and Agarwal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agarwal IndustrialLimite and Healthcare Global 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 Healthcare Global Enterprises are associated (or correlated) with Agarwal IndustrialLimite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agarwal IndustrialLimite has no effect on the direction of Healthcare Global i.e., Healthcare Global and Agarwal IndustrialLimite go up and down completely randomly.

Pair Corralation between Healthcare Global and Agarwal IndustrialLimite

Assuming the 90 days trading horizon Healthcare Global Enterprises is expected to generate 0.93 times more return on investment than Agarwal IndustrialLimite. However, Healthcare Global Enterprises is 1.07 times less risky than Agarwal IndustrialLimite. It trades about 0.03 of its potential returns per unit of risk. Agarwal Industrial is currently generating about -0.14 per unit of risk. If you would invest  50,240  in Healthcare Global Enterprises on November 29, 2024 and sell it today you would earn a total of  1,275  from holding Healthcare Global Enterprises or generate 2.54% return on investment over 90 days.

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

Healthcare Global Enterprises  vs.  Agarwal Industrial

Healthcare Global

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Healthcare Global is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Agarwal IndustrialLimite

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agarwal Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Healthcare Global and Agarwal IndustrialLimite

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

The idea behind Healthcare Global Enterprises and Agarwal Industrial 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.