Correlation Between Indo Global and Allstar Health

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

By analyzing existing cross correlation between Indo Global Exchange and Allstar Health Brands, you can compare the effects of market volatilities on Indo Global and Allstar Health 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 Indo Global with a short position of Allstar Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Global and Allstar Health.

Diversification Opportunities for Indo Global and Allstar Health

-0.25

Correlation Coefficient

Indo Global  Allstar Health

Very good diversification

The 3 months correlation between Indo and Allstar is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Indo Global Exchange and Allstar Health Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstar Health Brands and Indo Global 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 Indo Global Exchange are associated (or correlated) with Allstar Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstar Health Brands has no effect on the direction of Indo Global i.e., Indo Global and Allstar Health go up and down completely randomly.

Pair Corralation between Indo Global and Allstar Health

Given the investment horizon of 90 days Indo Global Exchange is expected to generate 0.79 times more return on investment than Allstar Health. However, Indo Global Exchange is 1.26 times less risky than Allstar Health. It trades about 0.11 of its potential returns per unit of risk. Allstar Health Brands is currently generating about -0.04 per unit of risk. If you would invest  0.07  in Indo Global Exchange on November 29, 2024 and sell it today you would earn a total of  0.03  from holding Indo Global Exchange or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Indo Global Exchange  vs.  Allstar Health Brands

Indo Global Exchange

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indo Global Exchange are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Indo Global showed solid returns over the last few months and may actually be approaching a breakup point.

Allstar Health Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allstar Health Brands 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 basic 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 Indo Global and Allstar Health

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

The idea behind Indo Global Exchange and Allstar Health Brands 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.