Correlation Between Hospital Mater and Alphabet

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

By analyzing existing cross correlation between Hospital Mater Dei and Alphabet, you can compare the effects of market volatilities on Hospital Mater and Alphabet 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 Hospital Mater with a short position of Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and Alphabet.

Diversification Opportunities for Hospital Mater and Alphabet

-0.12

Correlation Coefficient

Hospital Mater  Alphabet

Good diversification

The 3 months correlation between Hospital and Alphabet is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and Alphabet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet has no effect on the direction of Hospital Mater i.e., Hospital Mater and Alphabet go up and down completely randomly.

Pair Corralation between Hospital Mater and Alphabet

Assuming the 90 days trading horizon Hospital Mater Dei is expected to generate 2.02 times more return on investment than Alphabet. However, Hospital Mater is 2.02 times more volatile than Alphabet. It trades about 0.01 of its potential returns per unit of risk. Alphabet is currently generating about -0.21 per unit of risk. If you would invest  367.00  in Hospital Mater Dei on December 25, 2024 and sell it today you would lose (7.00) from holding Hospital Mater Dei or give up 1.91% of portfolio value over 90 days.

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

Hospital Mater Dei  vs.  Alphabet

Hospital Mater Dei

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hospital Mater Dei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hospital Mater is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Alphabet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hospital Mater and Alphabet

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

The idea behind Hospital Mater Dei and Alphabet 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.