Correlation Between Healthcare Triangle and Healixa

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

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

Diversification Opportunities for Healthcare Triangle and Healixa

-0.59

Correlation Coefficient

Healthcare Triangle  Healixa

Excellent diversification

The 3 months correlation between Healthcare and Healixa is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Triangle and Healixa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healixa 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 Healixa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healixa has no effect on the direction of Healthcare Triangle i.e., Healthcare Triangle and Healixa go up and down completely randomly.

Pair Corralation between Healthcare Triangle and Healixa

Given the investment horizon of 90 days Healthcare Triangle is expected to generate 1.65 times more return on investment than Healixa. However, Healthcare Triangle is 1.65 times more volatile than Healixa. It trades about 0.15 of its potential returns per unit of risk. Healixa is currently generating about 0.01 per unit of risk. If you would invest  32.00  in Healthcare Triangle on September 14, 2024 and sell it today you would earn a total of  61.00  from holding Healthcare Triangle or generate 190.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Healthcare Triangle  vs.  Healixa

Healthcare Triangle

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Triangle are ranked lower than 11 (%) 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.

Healixa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healixa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively abnormal basic indicators, Healixa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Healthcare Triangle and Healixa

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

The idea behind Healthcare Triangle and Healixa 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.