Correlation Between Wesana Health and India Globalization

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

By analyzing existing cross correlation between Wesana Health Holdings and India Globalization Capital, you can compare the effects of market volatilities on Wesana Health and India Globalization 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 Wesana Health with a short position of India Globalization. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesana Health and India Globalization.

Diversification Opportunities for Wesana Health and India Globalization

0.01

Correlation Coefficient

Wesana Health  India Globalization

Significant diversification

The 3 months correlation between Wesana and India is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wesana Health Holdings and India Globalization Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Globalization and Wesana 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 Wesana Health Holdings are associated (or correlated) with India Globalization. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Globalization has no effect on the direction of Wesana Health i.e., Wesana Health and India Globalization go up and down completely randomly.

Pair Corralation between Wesana Health and India Globalization

Assuming the 90 days horizon Wesana Health Holdings is expected to generate 32.52 times more return on investment than India Globalization. However, Wesana Health is 32.52 times more volatile than India Globalization Capital. It trades about 0.28 of its potential returns per unit of risk. India Globalization Capital is currently generating about -0.02 per unit of risk. If you would invest  0.62  in Wesana Health Holdings on September 25, 2024 and sell it today you would earn a total of  1.58  from holding Wesana Health Holdings or generate 254.84% return on investment over 90 days.

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

Wesana Health Holdings  vs.  India Globalization Capital

Wesana Health Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wesana Health Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Wesana Health reported solid returns over the last few months and may actually be approaching a breakup point.

India Globalization

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in India Globalization Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, India Globalization exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wesana Health and India Globalization

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

The idea behind Wesana Health Holdings and India Globalization Capital 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.