Correlation Between Seraphim Space and Target Healthcare

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

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

Diversification Opportunities for Seraphim Space and Target Healthcare

0.48

Correlation Coefficient

Seraphim Space  Target Healthcare

Very weak diversification

The 3 months correlation between Seraphim and Target is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Seraphim Space Investment and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT and Seraphim Space 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 Seraphim Space Investment are associated (or correlated) with Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of Seraphim Space i.e., Seraphim Space and Target Healthcare go up and down completely randomly.

Pair Corralation between Seraphim Space and Target Healthcare

Assuming the 90 days trading horizon Seraphim Space is expected to generate 1.47 times less return on investment than Target Healthcare. In addition to that, Seraphim Space is 1.75 times more volatile than Target Healthcare REIT. It trades about 0.04 of its total potential returns per unit of risk. Target Healthcare REIT is currently generating about 0.12 per unit of volatility. If you would invest  8,310  in Target Healthcare REIT on December 25, 2024 and sell it today you would earn a total of  920.00  from holding Target Healthcare REIT or generate 11.07% return on investment over 90 days.

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

Seraphim Space Investment  vs.  Target Healthcare REIT

Seraphim Space Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seraphim Space Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Seraphim Space may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Target Healthcare REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Target Healthcare REIT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Target Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Seraphim Space and Target Healthcare

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

The idea behind Seraphim Space Investment and Target Healthcare REIT 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.