Correlation Between Regional Health and CryoCell International

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

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

Diversification Opportunities for Regional Health and CryoCell International

-0.26

Correlation Coefficient

Regional Health  CryoCell International

Very good diversification

The 3 months correlation between Regional and CryoCell is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Regional Health Properties and CryoCell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoCell International and Regional 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 Regional Health Properties are associated (or correlated) with CryoCell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoCell International has no effect on the direction of Regional Health i.e., Regional Health and CryoCell International go up and down completely randomly.

Pair Corralation between Regional Health and CryoCell International

Considering the 90-day investment horizon Regional Health Properties is expected to generate 7.51 times more return on investment than CryoCell International. However, Regional Health is 7.51 times more volatile than CryoCell International. It trades about 0.15 of its potential returns per unit of risk. CryoCell International is currently generating about -0.04 per unit of risk. If you would invest  153.00  in Regional Health Properties on December 30, 2024 and sell it today you would earn a total of  79.00  from holding Regional Health Properties or generate 51.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.32%
Values	Daily Returns

Regional Health Properties  vs.  CryoCell International

Regional Health Prop

Risk-Adjusted Performance

Good

Over the last 90 days Regional Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak technical indicators, Regional Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

CryoCell International

Risk-Adjusted Performance

Very Weak

Over the last 90 days CryoCell International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Regional Health and CryoCell International

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

The idea behind Regional Health Properties and CryoCell International 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.