Correlation Between Healthcare Global and Tube Investments

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

Diversification Opportunities for Healthcare Global and Tube Investments

-0.38

Correlation Coefficient

Healthcare Global  Tube Investments

Very good diversification

The 3 months correlation between Healthcare and Tube is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Global Enterprises and Tube Investments of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tube Investments 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 Tube Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tube Investments has no effect on the direction of Healthcare Global i.e., Healthcare Global and Tube Investments go up and down completely randomly.

Pair Corralation between Healthcare Global and Tube Investments

Assuming the 90 days trading horizon Healthcare Global Enterprises is expected to generate 0.74 times more return on investment than Tube Investments. However, Healthcare Global Enterprises is 1.36 times less risky than Tube Investments. It trades about 0.1 of its potential returns per unit of risk. Tube Investments of is currently generating about -0.14 per unit of risk. If you would invest  47,235  in Healthcare Global Enterprises on December 25, 2024 and sell it today you would earn a total of  5,620  from holding Healthcare Global Enterprises or generate 11.9% 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.  Tube Investments of

Healthcare Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Healthcare Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tube Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tube Investments of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Healthcare Global and Tube Investments

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

The idea behind Healthcare Global Enterprises and Tube Investments of 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.