Correlation Between Primary Health and Tritax Big

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

By analyzing existing cross correlation between Primary Health Properties and Tritax Big Box, you can compare the effects of market volatilities on Primary Health and Tritax Big 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 Primary Health with a short position of Tritax Big. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primary Health and Tritax Big.

Diversification Opportunities for Primary Health and Tritax Big

0.95

Correlation Coefficient

Primary Health  Tritax Big

Almost no diversification

The 3 months correlation between Primary and Tritax is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Primary Health Properties and Tritax Big Box in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tritax Big Box and Primary 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 Primary Health Properties are associated (or correlated) with Tritax Big. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tritax Big Box has no effect on the direction of Primary Health i.e., Primary Health and Tritax Big go up and down completely randomly.

Pair Corralation between Primary Health and Tritax Big

Assuming the 90 days trading horizon Primary Health Properties is expected to under-perform the Tritax Big. But the stock apears to be less risky and, when comparing its historical volatility, Primary Health Properties is 1.17 times less risky than Tritax Big. The stock trades about -0.27 of its potential returns per unit of risk. The Tritax Big Box is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest  13,610  in Tritax Big Box on October 11, 2024 and sell it today you would lose (710.00) from holding Tritax Big Box or give up 5.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Primary Health Properties  vs.  Tritax Big Box

Primary Health Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primary Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Tritax Big Box

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tritax Big Box has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Primary Health and Tritax Big

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

The idea behind Primary Health Properties and Tritax Big Box 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.