Correlation Between ILFS Investment and Healthcare Global

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

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

Diversification Opportunities for ILFS Investment and Healthcare Global

0.1

Correlation Coefficient

ILFS Investment  Healthcare Global

Average diversification

The 3 months correlation between ILFS and Healthcare is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ILFS Investment Managers and Healthcare Global Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Global and ILFS Investment 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 ILFS Investment Managers are associated (or correlated) with Healthcare Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Global has no effect on the direction of ILFS Investment i.e., ILFS Investment and Healthcare Global go up and down completely randomly.

Pair Corralation between ILFS Investment and Healthcare Global

Assuming the 90 days trading horizon ILFS Investment Managers is expected to generate 1.8 times more return on investment than Healthcare Global. However, ILFS Investment is 1.8 times more volatile than Healthcare Global Enterprises. It trades about 0.06 of its potential returns per unit of risk. Healthcare Global Enterprises is currently generating about 0.08 per unit of risk. If you would invest  584.00  in ILFS Investment Managers on October 10, 2024 and sell it today you would earn a total of  480.00  from holding ILFS Investment Managers or generate 82.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.78%
Values	Daily Returns

ILFS Investment Managers  vs.  Healthcare Global Enterprises

ILFS Investment Managers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ILFS Investment Managers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Healthcare Global

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Healthcare Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ILFS Investment and Healthcare Global

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

The idea behind ILFS Investment Managers and Healthcare Global Enterprises 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.