Correlation Between Healthcare Global and Shyam Metalics

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

Diversification Opportunities for Healthcare Global and Shyam Metalics

-0.03

Correlation Coefficient

Healthcare Global  Shyam Metalics

Good diversification

The 3 months correlation between Healthcare and Shyam is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Global Enterprises and Shyam Metalics and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyam Metalics 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 Shyam Metalics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyam Metalics has no effect on the direction of Healthcare Global i.e., Healthcare Global and Shyam Metalics go up and down completely randomly.

Pair Corralation between Healthcare Global and Shyam Metalics

Assuming the 90 days trading horizon Healthcare Global Enterprises is expected to generate 0.84 times more return on investment than Shyam Metalics. However, Healthcare Global Enterprises is 1.18 times less risky than Shyam Metalics. It trades about 0.24 of its potential returns per unit of risk. Shyam Metalics and is currently generating about 0.04 per unit of risk. If you would invest  38,685  in Healthcare Global Enterprises on August 31, 2024 and sell it today you would earn a total of  11,675  from holding Healthcare Global Enterprises or generate 30.18% 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.  Shyam Metalics and

Healthcare Global

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Healthcare Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Shyam Metalics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shyam Metalics and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Shyam Metalics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Healthcare Global and Shyam Metalics

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

The idea behind Healthcare Global Enterprises and Shyam Metalics and 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.