Correlation Between Regional Health and Apple

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Regional Health and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Regional Health and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Health and Apple.

Diversification Opportunities for Regional Health and Apple

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Regional and Apple is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Regional Health Properties and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Regional Health i.e., Regional Health and Apple go up and down completely randomly.

Pair Corralation between Regional Health and Apple

Assuming the 90 days horizon Regional Health Properties is expected to generate 5.87 times more return on investment than Apple. However, Regional Health is 5.87 times more volatile than Apple Inc. It trades about 0.11 of its potential returns per unit of risk. Apple Inc is currently generating about 0.16 per unit of risk. If you would invest  360.00  in Regional Health Properties on September 28, 2024 and sell it today you would earn a total of  140.00  from holding Regional Health Properties or generate 38.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy96.88%
ValuesDaily Returns

Regional Health Properties  vs.  Apple Inc

 Performance 
       Timeline  
Regional Health Prop 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Regional Health Properties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Regional Health sustained solid returns over the last few months and may actually be approaching a breakup point.
Apple Inc 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Regional Health and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Regional Health and Apple

The main advantage of trading using opposite Regional Health and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Health position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind Regional Health Properties and Apple Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences