Correlation Between Global Healthcare and Symphony Floating

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

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

Diversification Opportunities for Global Healthcare and Symphony Floating

-0.87

Correlation Coefficient

Global Healthcare  Symphony Floating

Pay attention - limited upside

The 3 months correlation between Global and Symphony is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Global Healthcare Income and Symphony Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Floating Rate and Global Healthcare 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 Global Healthcare Income are associated (or correlated) with Symphony Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Floating Rate has no effect on the direction of Global Healthcare i.e., Global Healthcare and Symphony Floating go up and down completely randomly.

Pair Corralation between Global Healthcare and Symphony Floating

Assuming the 90 days trading horizon Global Healthcare Income is expected to under-perform the Symphony Floating. In addition to that, Global Healthcare is 2.4 times more volatile than Symphony Floating Rate. It trades about -0.08 of its total potential returns per unit of risk. Symphony Floating Rate is currently generating about 0.1 per unit of volatility. If you would invest  685.00  in Symphony Floating Rate on September 2, 2024 and sell it today you would earn a total of  20.00  from holding Symphony Floating Rate or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Global Healthcare Income  vs.  Symphony Floating Rate

Global Healthcare Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Healthcare Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, Global Healthcare is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Symphony Floating Rate

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Symphony Floating Rate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, Symphony Floating is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Healthcare and Symphony Floating

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

The idea behind Global Healthcare Income and Symphony Floating Rate 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.