Correlation Between Praram 9 and Regional Container

Can any of the company-specific risk be diversified away by investing in both Praram 9 and Regional Container 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 Praram 9 and Regional Container into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Praram 9 Hospital and Regional Container Lines, you can compare the effects of market volatilities on Praram 9 and Regional Container 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 Praram 9 with a short position of Regional Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praram 9 and Regional Container.

Diversification Opportunities for Praram 9 and Regional Container

0.56

Correlation Coefficient

Praram 9  Regional Container

Very weak diversification

The 3 months correlation between Praram and Regional is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Praram 9 Hospital and Regional Container Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Container Lines and Praram 9 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 Praram 9 Hospital are associated (or correlated) with Regional Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Container Lines has no effect on the direction of Praram 9 i.e., Praram 9 and Regional Container go up and down completely randomly.

Pair Corralation between Praram 9 and Regional Container

Assuming the 90 days trading horizon Praram 9 Hospital is expected to generate 0.86 times more return on investment than Regional Container. However, Praram 9 Hospital is 1.16 times less risky than Regional Container. It trades about -0.22 of its potential returns per unit of risk. Regional Container Lines is currently generating about -0.19 per unit of risk. If you would invest  2,600  in Praram 9 Hospital on October 24, 2024 and sell it today you would lose (210.00) from holding Praram 9 Hospital or give up 8.08% of portfolio value over 90 days.

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

Praram 9 Hospital  vs.  Regional Container Lines

Praram 9 Hospital

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Praram 9 Hospital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Praram 9 is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Regional Container Lines

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regional Container Lines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Regional Container may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Praram 9 and Regional Container

The main advantage of trading using opposite Praram 9 and Regional Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praram 9 position performs unexpectedly, Regional Container 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 Regional Container will offset losses from the drop in Regional Container's long position.

The idea behind Praram 9 Hospital and Regional Container Lines 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.