Correlation Between MAS Financial and Entero Healthcare

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

By analyzing existing cross correlation between MAS Financial Services and Entero Healthcare Solutions, you can compare the effects of market volatilities on MAS Financial and Entero 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 MAS Financial with a short position of Entero Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAS Financial and Entero Healthcare.

Diversification Opportunities for MAS Financial and Entero Healthcare

-0.22

Correlation Coefficient

MAS Financial  Entero Healthcare

Very good diversification

The 3 months correlation between MAS and Entero is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MAS Financial Services and Entero Healthcare Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entero Healthcare and MAS Financial 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 MAS Financial Services are associated (or correlated) with Entero Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entero Healthcare has no effect on the direction of MAS Financial i.e., MAS Financial and Entero Healthcare go up and down completely randomly.

Pair Corralation between MAS Financial and Entero Healthcare

Assuming the 90 days trading horizon MAS Financial Services is expected to generate 3.81 times more return on investment than Entero Healthcare. However, MAS Financial is 3.81 times more volatile than Entero Healthcare Solutions. It trades about 0.03 of its potential returns per unit of risk. Entero Healthcare Solutions is currently generating about 0.05 per unit of risk. If you would invest  27,447  in MAS Financial Services on September 29, 2024 and sell it today you would lose (322.00) from holding MAS Financial Services or give up 1.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.14%
Values	Daily Returns

MAS Financial Services  vs.  Entero Healthcare Solutions

MAS Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAS Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Entero Healthcare

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with MAS Financial and Entero Healthcare

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

The idea behind MAS Financial Services and Entero Healthcare Solutions 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.