Correlation Between Healthcare Triangle and DATATRAK International

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

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

Diversification Opportunities for Healthcare Triangle and DATATRAK International

0.48

Correlation Coefficient

Healthcare Triangle  DATATRAK International

Very weak diversification

The 3 months correlation between Healthcare and DATATRAK is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Triangle and DATATRAK International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATATRAK International and Healthcare Triangle 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 Triangle are associated (or correlated) with DATATRAK International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATATRAK International has no effect on the direction of Healthcare Triangle i.e., Healthcare Triangle and DATATRAK International go up and down completely randomly.

Pair Corralation between Healthcare Triangle and DATATRAK International

If you would invest  71.00  in Healthcare Triangle on September 4, 2024 and sell it today you would lose (7.00) from holding Healthcare Triangle or give up 9.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Healthcare Triangle  vs.  DATATRAK International

Healthcare Triangle

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Triangle are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Healthcare Triangle demonstrated solid returns over the last few months and may actually be approaching a breakup point.

DATATRAK International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DATATRAK International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, DATATRAK International is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Healthcare Triangle and DATATRAK International

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

The idea behind Healthcare Triangle and DATATRAK International 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.