Correlation Between Universal Health and Alset Ehome

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

By analyzing existing cross correlation between Universal Health Realty and Alset Ehome International, you can compare the effects of market volatilities on Universal Health and Alset Ehome 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 Universal Health with a short position of Alset Ehome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Alset Ehome.

Diversification Opportunities for Universal Health and Alset Ehome

0.17

Correlation Coefficient

Universal Health  Alset Ehome

Average diversification

The 3 months correlation between Universal and Alset is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and Alset Ehome International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alset Ehome International and Universal Health 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 Universal Health Realty are associated (or correlated) with Alset Ehome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alset Ehome International has no effect on the direction of Universal Health i.e., Universal Health and Alset Ehome go up and down completely randomly.

Pair Corralation between Universal Health and Alset Ehome

Considering the 90-day investment horizon Universal Health Realty is expected to generate 0.26 times more return on investment than Alset Ehome. However, Universal Health Realty is 3.9 times less risky than Alset Ehome. It trades about -0.26 of its potential returns per unit of risk. Alset Ehome International is currently generating about -0.07 per unit of risk. If you would invest  4,018  in Universal Health Realty on September 25, 2024 and sell it today you would lose (334.00) from holding Universal Health Realty or give up 8.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Universal Health Realty  vs.  Alset Ehome International

Universal Health Realty

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alset Ehome International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alset Ehome International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Alset Ehome is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Universal Health and Alset Ehome

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

The idea behind Universal Health Realty and Alset Ehome International 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.