Correlation Between Table Trac and Pacific Health

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

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

Diversification Opportunities for Table Trac and Pacific Health

-0.15

Correlation Coefficient

Table Trac  Pacific Health

Good diversification

The 3 months correlation between Table and Pacific is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Table Trac 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 Table Trac 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 Table Trac 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 Table Trac i.e., Table Trac and Pacific Health go up and down completely randomly.

Pair Corralation between Table Trac and Pacific Health

Given the investment horizon of 90 days Table Trac is expected to generate 1.08 times more return on investment than Pacific Health. However, Table Trac is 1.08 times more volatile than Pacific Health Care. It trades about 0.06 of its potential returns per unit of risk. Pacific Health Care is currently generating about 0.03 per unit of risk. If you would invest  399.00  in Table Trac on September 12, 2024 and sell it today you would earn a total of  41.00  from holding Table Trac or generate 10.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Table Trac  vs.  Pacific Health Care

Table Trac

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Table Trac are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Table Trac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pacific Health Care

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Health Care are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Pacific Health is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Table Trac and Pacific Health

The main advantage of trading using opposite Table Trac and Pacific Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Table Trac 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 Table Trac 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.