Correlation Between Advanced Health and ProStar Holdings

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

Diversification Opportunities for Advanced Health and ProStar Holdings

0.0

Correlation Coefficient

Advanced Health  ProStar Holdings

Pay attention - limited upside

The 3 months correlation between Advanced and ProStar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Health Intelligence and ProStar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProStar Holdings 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 ProStar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProStar Holdings has no effect on the direction of Advanced Health i.e., Advanced Health and ProStar Holdings go up and down completely randomly.

Pair Corralation between Advanced Health and ProStar Holdings

Assuming the 90 days horizon Advanced Health Intelligence is expected to under-perform the ProStar Holdings. But the otc stock apears to be less risky and, when comparing its historical volatility, Advanced Health Intelligence is 2.33 times less risky than ProStar Holdings. The otc stock trades about -0.02 of its potential returns per unit of risk. The ProStar Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  13.00  in ProStar Holdings on December 1, 2024 and sell it today you would lose (3.00) from holding ProStar Holdings or give up 23.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Advanced Health Intelligence  vs.  ProStar Holdings

Advanced Health Inte

Risk-Adjusted Performance

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 nearly stable basic indicators, Advanced Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ProStar Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ProStar Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, ProStar Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advanced Health and ProStar Holdings

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

The idea behind Advanced Health Intelligence and ProStar Holdings 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.