Correlation Between Advanced Health and Adcore

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

By analyzing existing cross correlation between Advanced Health Intelligence and Adcore Inc, you can compare the effects of market volatilities on Advanced Health and Adcore 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 Advanced Health with a short position of Adcore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Health and Adcore.

Diversification Opportunities for Advanced Health and Adcore

-0.04

Correlation Coefficient

Advanced Health  Adcore

Good diversification

The 3 months correlation between Advanced and Adcore is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Health Intelligence and Adcore Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adcore Inc and Advanced Health 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 Advanced Health Intelligence are associated (or correlated) with Adcore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adcore Inc has no effect on the direction of Advanced Health i.e., Advanced Health and Adcore go up and down completely randomly.

Pair Corralation between Advanced Health and Adcore

Assuming the 90 days horizon Advanced Health Intelligence is expected to generate 26.32 times more return on investment than Adcore. However, Advanced Health is 26.32 times more volatile than Adcore Inc. It trades about 0.12 of its potential returns per unit of risk. Adcore Inc is currently generating about -0.01 per unit of risk. If you would invest  5.00  in Advanced Health Intelligence on September 3, 2024 and sell it today you would lose (4.60) from holding Advanced Health Intelligence or give up 92.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.06%
Values	Daily Returns

Advanced Health Intelligence  vs.  Adcore Inc

Advanced Health Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Health Intelligence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Adcore Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adcore Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Advanced Health and Adcore

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

The idea behind Advanced Health Intelligence and Adcore Inc 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.

Check out your portfolio center.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.