Correlation Between Healthcare Global and Next Mediaworks

Can any of the company-specific risk be diversified away by investing in both Healthcare Global and Next Mediaworks 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 Next Mediaworks 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 Next Mediaworks Limited, you can compare the effects of market volatilities on Healthcare Global and Next Mediaworks 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 Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Global and Next Mediaworks.

Diversification Opportunities for Healthcare Global and Next Mediaworks

0.52

Correlation Coefficient

Healthcare Global  Next Mediaworks

Very weak diversification

The 3 months correlation between Healthcare and Next is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Global Enterprises and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks 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 Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of Healthcare Global i.e., Healthcare Global and Next Mediaworks go up and down completely randomly.

Pair Corralation between Healthcare Global and Next Mediaworks

Assuming the 90 days trading horizon Healthcare Global Enterprises is expected to generate 0.47 times more return on investment than Next Mediaworks. However, Healthcare Global Enterprises is 2.14 times less risky than Next Mediaworks. It trades about 0.14 of its potential returns per unit of risk. Next Mediaworks Limited is currently generating about 0.04 per unit of risk. If you would invest  42,815  in Healthcare Global Enterprises on October 25, 2024 and sell it today you would earn a total of  8,695  from holding Healthcare Global Enterprises or generate 20.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Healthcare Global Enterprises  vs.  Next Mediaworks Limited

Healthcare Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Healthcare Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Next Mediaworks

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Next Mediaworks Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Next Mediaworks may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Healthcare Global and Next Mediaworks

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

The idea behind Healthcare Global Enterprises and Next Mediaworks 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.