Correlation Between Advanced Health and Blackbird Plc

Can any of the company-specific risk be diversified away by investing in both Advanced Health and Blackbird Plc 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 Blackbird Plc 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 Blackbird plc, you can compare the effects of market volatilities on Advanced Health and Blackbird Plc 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 Blackbird Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Health and Blackbird Plc.

Diversification Opportunities for Advanced Health and Blackbird Plc

-0.57

Correlation Coefficient

Advanced Health  Blackbird Plc

Excellent diversification

The 3 months correlation between Advanced and Blackbird is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Health Intelligence and Blackbird plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbird plc 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 Blackbird Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbird plc has no effect on the direction of Advanced Health i.e., Advanced Health and Blackbird Plc go up and down completely randomly.

Pair Corralation between Advanced Health and Blackbird Plc

Assuming the 90 days horizon Advanced Health Intelligence is expected to under-perform the Blackbird Plc. But the otc stock apears to be less risky and, when comparing its historical volatility, Advanced Health Intelligence is 1.32 times less risky than Blackbird Plc. The otc stock trades about -0.03 of its potential returns per unit of risk. The Blackbird plc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6.25  in Blackbird plc on September 2, 2024 and sell it today you would earn a total of  3.75  from holding Blackbird plc or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Advanced Health Intelligence  vs.  Blackbird plc

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 inconsistent 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.

Blackbird plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbird plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Blackbird Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advanced Health and Blackbird Plc

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

The idea behind Advanced Health Intelligence and Blackbird plc 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.