Correlation Between Tatton Asset and MyHealthChecked Plc

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

By analyzing existing cross correlation between Tatton Asset Management and MyHealthChecked Plc, you can compare the effects of market volatilities on Tatton Asset and MyHealthChecked Plc 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 Tatton Asset with a short position of MyHealthChecked Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and MyHealthChecked Plc.

Diversification Opportunities for Tatton Asset and MyHealthChecked Plc

-0.75

Correlation Coefficient

Tatton Asset  MyHealthChecked Plc

Pay attention - limited upside

The 3 months correlation between Tatton and MyHealthChecked is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and MyHealthChecked Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyHealthChecked Plc and Tatton Asset 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 Tatton Asset Management are associated (or correlated) with MyHealthChecked Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyHealthChecked Plc has no effect on the direction of Tatton Asset i.e., Tatton Asset and MyHealthChecked Plc go up and down completely randomly.

Pair Corralation between Tatton Asset and MyHealthChecked Plc

Assuming the 90 days trading horizon Tatton Asset Management is expected to generate 0.41 times more return on investment than MyHealthChecked Plc. However, Tatton Asset Management is 2.45 times less risky than MyHealthChecked Plc. It trades about 0.05 of its potential returns per unit of risk. MyHealthChecked Plc is currently generating about 0.02 per unit of risk. If you would invest  43,447  in Tatton Asset Management on December 2, 2024 and sell it today you would earn a total of  20,553  from holding Tatton Asset Management or generate 47.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.99%
Values	Daily Returns

Tatton Asset Management  vs.  MyHealthChecked Plc

Tatton Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tatton Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

MyHealthChecked Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MyHealthChecked Plc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, MyHealthChecked Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tatton Asset and MyHealthChecked Plc

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

The idea behind Tatton Asset Management and MyHealthChecked Plc 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.