Correlation Between Max Financial and Global Health

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

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

Diversification Opportunities for Max Financial and Global Health

-0.09

Correlation Coefficient

Max Financial  Global Health

Good diversification

The 3 months correlation between Max and Global is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and Global Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health Limited and Max 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 Max Financial Services are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health Limited has no effect on the direction of Max Financial i.e., Max Financial and Global Health go up and down completely randomly.

Pair Corralation between Max Financial and Global Health

Assuming the 90 days trading horizon Max Financial Services is expected to generate 0.82 times more return on investment than Global Health. However, Max Financial Services is 1.21 times less risky than Global Health. It trades about 0.05 of its potential returns per unit of risk. Global Health Limited is currently generating about 0.01 per unit of risk. If you would invest  89,895  in Max Financial Services on October 14, 2024 and sell it today you would earn a total of  17,870  from holding Max Financial Services or generate 19.88% return on investment over 90 days.

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

Max Financial Services  vs.  Global Health Limited

Max Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Max Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Global Health Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Health Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Global Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Max Financial and Global Health

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

The idea behind Max Financial Services and Global Health Limited 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.