Correlation Between Saker Aviation and Pacific Health

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

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

Diversification Opportunities for Saker Aviation and Pacific Health

0.57

Correlation Coefficient

Saker Aviation  Pacific Health

Very weak diversification

The 3 months correlation between Saker and Pacific is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Saker Aviation Services and Pacific Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Health Care and Saker Aviation 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 Saker Aviation Services are associated (or correlated) with Pacific Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Health Care has no effect on the direction of Saker Aviation i.e., Saker Aviation and Pacific Health go up and down completely randomly.

Pair Corralation between Saker Aviation and Pacific Health

Given the investment horizon of 90 days Saker Aviation Services is expected to under-perform the Pacific Health. In addition to that, Saker Aviation is 1.85 times more volatile than Pacific Health Care. It trades about -0.06 of its total potential returns per unit of risk. Pacific Health Care is currently generating about -0.06 per unit of volatility. If you would invest  85.00  in Pacific Health Care on October 26, 2024 and sell it today you would lose (11.00) from holding Pacific Health Care or give up 12.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Saker Aviation Services  vs.  Pacific Health Care

Saker Aviation Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saker Aviation Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pacific Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacific Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Saker Aviation and Pacific Health

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

The idea behind Saker Aviation Services and Pacific Health Care 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.