Correlation Between Harrow Health, and Rockwell Medical

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

By analyzing existing cross correlation between Harrow Health, 11875 and Rockwell Medical, you can compare the effects of market volatilities on Harrow Health, and Rockwell Medical 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 Harrow Health, with a short position of Rockwell Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harrow Health, and Rockwell Medical.

Diversification Opportunities for Harrow Health, and Rockwell Medical

-0.3

Correlation Coefficient

Harrow Health,  Rockwell Medical

Very good diversification

The 3 months correlation between Harrow and Rockwell is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harrow Health, 11875 and Rockwell Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockwell Medical and Harrow Health, 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 Harrow Health, 11875 are associated (or correlated) with Rockwell Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockwell Medical has no effect on the direction of Harrow Health, i.e., Harrow Health, and Rockwell Medical go up and down completely randomly.

Pair Corralation between Harrow Health, and Rockwell Medical

Assuming the 90 days horizon Harrow Health, is expected to generate 4.0 times less return on investment than Rockwell Medical. But when comparing it to its historical volatility, Harrow Health, 11875 is 8.66 times less risky than Rockwell Medical. It trades about 0.09 of its potential returns per unit of risk. Rockwell Medical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  145.00  in Rockwell Medical on October 21, 2024 and sell it today you would earn a total of  67.00  from holding Rockwell Medical or generate 46.21% return on investment over 90 days.

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

Harrow Health, 11875  vs.  Rockwell Medical

Harrow Health, 11875

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harrow Health, 11875 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harrow Health, is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Rockwell Medical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Harrow Health, and Rockwell Medical

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

The idea behind Harrow Health, 11875 and Rockwell Medical 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.