Correlation Between Secure Property and Induction Healthcare

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

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

Diversification Opportunities for Secure Property and Induction Healthcare

0.24

Correlation Coefficient

Secure Property  Induction Healthcare

Modest diversification

The 3 months correlation between Secure and Induction is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Secure Property Development and Induction Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Induction Healthcare and Secure Property 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 Secure Property Development are associated (or correlated) with Induction Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Induction Healthcare has no effect on the direction of Secure Property i.e., Secure Property and Induction Healthcare go up and down completely randomly.

Pair Corralation between Secure Property and Induction Healthcare

Assuming the 90 days trading horizon Secure Property Development is expected to generate 1.68 times more return on investment than Induction Healthcare. However, Secure Property is 1.68 times more volatile than Induction Healthcare Group. It trades about -0.09 of its potential returns per unit of risk. Induction Healthcare Group is currently generating about -0.19 per unit of risk. If you would invest  450.00  in Secure Property Development on December 2, 2024 and sell it today you would lose (100.00) from holding Secure Property Development or give up 22.22% of portfolio value over 90 days.

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

Secure Property Development  vs.  Induction Healthcare Group

Secure Property Deve

Risk-Adjusted Performance

Very Weak

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

Induction Healthcare

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Secure Property and Induction Healthcare

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

The idea behind Secure Property Development and Induction Healthcare Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.