Correlation Between Healthcare Global and Niraj Ispat

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

Diversification Opportunities for Healthcare Global and Niraj Ispat

-0.13

Correlation Coefficient

Healthcare Global  Niraj Ispat

Good diversification

The 3 months correlation between Healthcare and Niraj is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Global Enterprises and Niraj Ispat Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niraj Ispat Industries 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 Niraj Ispat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niraj Ispat Industries has no effect on the direction of Healthcare Global i.e., Healthcare Global and Niraj Ispat go up and down completely randomly.

Pair Corralation between Healthcare Global and Niraj Ispat

Assuming the 90 days trading horizon Healthcare Global is expected to generate 11.94 times less return on investment than Niraj Ispat. In addition to that, Healthcare Global is 1.59 times more volatile than Niraj Ispat Industries. It trades about 0.01 of its total potential returns per unit of risk. Niraj Ispat Industries is currently generating about 0.24 per unit of volatility. If you would invest  21,442  in Niraj Ispat Industries on December 8, 2024 and sell it today you would earn a total of  5,274  from holding Niraj Ispat Industries or generate 24.6% 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.  Niraj Ispat Industries

Healthcare Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Healthcare Global Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Healthcare Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Niraj Ispat Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Niraj Ispat Industries are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Niraj Ispat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Healthcare Global and Niraj Ispat

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

The idea behind Healthcare Global Enterprises and Niraj Ispat Industries 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.