Correlation Between Solid Impact and Leveljump Healthcare

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

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

Diversification Opportunities for Solid Impact and Leveljump Healthcare

1.0

Correlation Coefficient

Solid Impact  Leveljump Healthcare

No risk reduction

The 3 months correlation between Solid and Leveljump is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Solid Impact Investments and Leveljump Healthcare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leveljump Healthcare Corp and Solid Impact 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 Solid Impact Investments are associated (or correlated) with Leveljump Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leveljump Healthcare Corp has no effect on the direction of Solid Impact i.e., Solid Impact and Leveljump Healthcare go up and down completely randomly.

Pair Corralation between Solid Impact and Leveljump Healthcare

Assuming the 90 days trading horizon Solid Impact Investments is expected to under-perform the Leveljump Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Solid Impact Investments is 2.14 times less risky than Leveljump Healthcare. The stock trades about -0.06 of its potential returns per unit of risk. The Leveljump Healthcare Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7.50  in Leveljump Healthcare Corp on October 4, 2024 and sell it today you would lose (2.50) from holding Leveljump Healthcare Corp or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Solid Impact Investments  vs.  Leveljump Healthcare Corp

Solid Impact Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solid Impact Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Solid Impact is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Leveljump Healthcare Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leveljump Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Leveljump Healthcare is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Solid Impact and Leveljump Healthcare

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

The idea behind Solid Impact Investments and Leveljump Healthcare Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.