Correlation Between Healthcare Triangle and MPLN Old

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

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

Diversification Opportunities for Healthcare Triangle and MPLN Old

0.06

Correlation Coefficient

Healthcare Triangle  MPLN Old

Significant diversification

The 3 months correlation between Healthcare and MPLN is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Triangle and MPLN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPLN Old 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 MPLN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPLN Old has no effect on the direction of Healthcare Triangle i.e., Healthcare Triangle and MPLN Old go up and down completely randomly.

Pair Corralation between Healthcare Triangle and MPLN Old

Given the investment horizon of 90 days Healthcare Triangle is expected to under-perform the MPLN Old. In addition to that, Healthcare Triangle is 1.69 times more volatile than MPLN Old. It trades about -0.05 of its total potential returns per unit of risk. MPLN Old is currently generating about 0.18 per unit of volatility. If you would invest  1,478  in MPLN Old on December 31, 2024 and sell it today you would earn a total of  837.00  from holding MPLN Old or generate 56.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	65.57%
Values	Daily Returns

Healthcare Triangle  vs.  MPLN Old

Healthcare Triangle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Healthcare Triangle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

MPLN Old

Risk-Adjusted Performance

Good

Over the last 90 days MPLN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating essential indicators, MPLN Old displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Healthcare Triangle and MPLN Old

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

The idea behind Healthcare Triangle and MPLN Old 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.