Correlation Between Reliq Health and Mitesco

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

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

Diversification Opportunities for Reliq Health and Mitesco

-0.65

Correlation Coefficient

Reliq Health  Mitesco

Excellent diversification

The 3 months correlation between Reliq and Mitesco is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Reliq Health Technologies and Mitesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitesco and Reliq 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 Reliq Health Technologies are associated (or correlated) with Mitesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitesco has no effect on the direction of Reliq Health i.e., Reliq Health and Mitesco go up and down completely randomly.

Pair Corralation between Reliq Health and Mitesco

Assuming the 90 days horizon Reliq Health Technologies is expected to generate 3.53 times more return on investment than Mitesco. However, Reliq Health is 3.53 times more volatile than Mitesco. It trades about 0.16 of its potential returns per unit of risk. Mitesco is currently generating about 0.16 per unit of risk. If you would invest  4.00  in Reliq Health Technologies on September 4, 2024 and sell it today you would lose (3.89) from holding Reliq Health Technologies or give up 97.25% of portfolio value over 90 days.

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

Reliq Health Technologies  vs.  Mitesco

Reliq Health Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Reliq Health Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Reliq Health reported solid returns over the last few months and may actually be approaching a breakup point.

Mitesco

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mitesco are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Mitesco demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Reliq Health and Mitesco

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

The idea behind Reliq Health Technologies and Mitesco 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.