Correlation Between Hindware Home and GPT Healthcare

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

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

Diversification Opportunities for Hindware Home and GPT Healthcare

0.17

Correlation Coefficient

Hindware Home  GPT Healthcare

Average diversification

The 3 months correlation between Hindware and GPT is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hindware Home Innovation and GPT Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Healthcare and Hindware Home 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 Hindware Home Innovation are associated (or correlated) with GPT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Healthcare has no effect on the direction of Hindware Home i.e., Hindware Home and GPT Healthcare go up and down completely randomly.

Pair Corralation between Hindware Home and GPT Healthcare

Assuming the 90 days trading horizon Hindware Home Innovation is expected to under-perform the GPT Healthcare. In addition to that, Hindware Home is 1.02 times more volatile than GPT Healthcare. It trades about -0.06 of its total potential returns per unit of risk. GPT Healthcare is currently generating about 0.0 per unit of volatility. If you would invest  19,672  in GPT Healthcare on October 4, 2024 and sell it today you would lose (1,282) from holding GPT Healthcare or give up 6.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	57.42%
Values	Daily Returns

Hindware Home Innovation  vs.  GPT Healthcare

Hindware Home Innovation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hindware Home Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

GPT Healthcare

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GPT Healthcare are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, GPT Healthcare is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Hindware Home and GPT Healthcare

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

The idea behind Hindware Home Innovation and GPT Healthcare 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.