Correlation Between All Iron and Labiana Health

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

By analyzing existing cross correlation between All Iron Re and Labiana Health SA, you can compare the effects of market volatilities on All Iron and Labiana 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 All Iron with a short position of Labiana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Iron and Labiana Health.

Diversification Opportunities for All Iron and Labiana Health

0.42

Correlation Coefficient

All Iron  Labiana Health

Very weak diversification

The 3 months correlation between All and Labiana is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re and Labiana Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labiana Health SA and All Iron 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 All Iron Re are associated (or correlated) with Labiana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labiana Health SA has no effect on the direction of All Iron i.e., All Iron and Labiana Health go up and down completely randomly.

Pair Corralation between All Iron and Labiana Health

Assuming the 90 days trading horizon All Iron is expected to generate 10.89 times less return on investment than Labiana Health. But when comparing it to its historical volatility, All Iron Re is 9.15 times less risky than Labiana Health. It trades about 0.13 of its potential returns per unit of risk. Labiana Health SA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  208.00  in Labiana Health SA on December 21, 2024 and sell it today you would earn a total of  110.00  from holding Labiana Health SA or generate 52.88% return on investment over 90 days.

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

All Iron Re  vs.  Labiana Health SA

All Iron Re

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in All Iron Re are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, All Iron is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Labiana Health SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Labiana Health SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Labiana Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with All Iron and Labiana Health

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

The idea behind All Iron Re and Labiana Health SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.