Correlation Between Honeywell Automation and MEDI ASSIST

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

By analyzing existing cross correlation between Honeywell Automation India and MEDI ASSIST HEALTHCARE, you can compare the effects of market volatilities on Honeywell Automation and MEDI ASSIST 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 Honeywell Automation with a short position of MEDI ASSIST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell Automation and MEDI ASSIST.

Diversification Opportunities for Honeywell Automation and MEDI ASSIST

0.91

Correlation Coefficient

Honeywell Automation  MEDI ASSIST

Almost no diversification

The 3 months correlation between Honeywell and MEDI is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell Automation India and MEDI ASSIST HEALTHCARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDI ASSIST HEALTHCARE and Honeywell Automation 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 Honeywell Automation India are associated (or correlated) with MEDI ASSIST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDI ASSIST HEALTHCARE has no effect on the direction of Honeywell Automation i.e., Honeywell Automation and MEDI ASSIST go up and down completely randomly.

Pair Corralation between Honeywell Automation and MEDI ASSIST

Assuming the 90 days trading horizon Honeywell Automation India is expected to generate 0.69 times more return on investment than MEDI ASSIST. However, Honeywell Automation India is 1.45 times less risky than MEDI ASSIST. It trades about -0.17 of its potential returns per unit of risk. MEDI ASSIST HEALTHCARE is currently generating about -0.14 per unit of risk. If you would invest  4,083,515  in Honeywell Automation India on November 29, 2024 and sell it today you would lose (725,960) from holding Honeywell Automation India or give up 17.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Honeywell Automation India  vs.  MEDI ASSIST HEALTHCARE

Honeywell Automation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Honeywell Automation India has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MEDI ASSIST HEALTHCARE

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEDI ASSIST HEALTHCARE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Honeywell Automation and MEDI ASSIST

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

The idea behind Honeywell Automation India and MEDI ASSIST 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.