Correlation Between Sakar Healthcare and Fortis Healthcare

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

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

Diversification Opportunities for Sakar Healthcare and Fortis Healthcare

-0.08

Correlation Coefficient

Sakar Healthcare  Fortis Healthcare

Good diversification

The 3 months correlation between Sakar and Fortis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sakar Healthcare Limited and Fortis Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Healthcare and Sakar Healthcare 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 Sakar Healthcare Limited are associated (or correlated) with Fortis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Healthcare has no effect on the direction of Sakar Healthcare i.e., Sakar Healthcare and Fortis Healthcare go up and down completely randomly.

Pair Corralation between Sakar Healthcare and Fortis Healthcare

Assuming the 90 days trading horizon Sakar Healthcare Limited is expected to under-perform the Fortis Healthcare. In addition to that, Sakar Healthcare is 1.1 times more volatile than Fortis Healthcare Limited. It trades about -0.24 of its total potential returns per unit of risk. Fortis Healthcare Limited is currently generating about 0.06 per unit of volatility. If you would invest  71,960  in Fortis Healthcare Limited on October 10, 2024 and sell it today you would earn a total of  1,555  from holding Fortis Healthcare Limited or generate 2.16% return on investment over 90 days.

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

Sakar Healthcare Limited  vs.  Fortis Healthcare Limited

Sakar Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sakar Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Sakar Healthcare is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Fortis Healthcare

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Sakar Healthcare and Fortis Healthcare

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

The idea behind Sakar Healthcare Limited and Fortis Healthcare Limited 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.