Correlation Between Yatharth Hospital and Vidhi Specialty

Can any of the company-specific risk be diversified away by investing in both Yatharth Hospital and Vidhi Specialty 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 Yatharth Hospital and Vidhi Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yatharth Hospital Trauma and Vidhi Specialty Food, you can compare the effects of market volatilities on Yatharth Hospital and Vidhi Specialty 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 Yatharth Hospital with a short position of Vidhi Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatharth Hospital and Vidhi Specialty.

Diversification Opportunities for Yatharth Hospital and Vidhi Specialty

0.11

Correlation Coefficient

Yatharth Hospital  Vidhi Specialty

Average diversification

The 3 months correlation between Yatharth and Vidhi is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Yatharth Hospital Trauma and Vidhi Specialty Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vidhi Specialty Food and Yatharth Hospital 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 Yatharth Hospital Trauma are associated (or correlated) with Vidhi Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vidhi Specialty Food has no effect on the direction of Yatharth Hospital i.e., Yatharth Hospital and Vidhi Specialty go up and down completely randomly.

Pair Corralation between Yatharth Hospital and Vidhi Specialty

Assuming the 90 days trading horizon Yatharth Hospital Trauma is expected to generate 1.34 times more return on investment than Vidhi Specialty. However, Yatharth Hospital is 1.34 times more volatile than Vidhi Specialty Food. It trades about 0.08 of its potential returns per unit of risk. Vidhi Specialty Food is currently generating about 0.06 per unit of risk. If you would invest  33,385  in Yatharth Hospital Trauma on September 18, 2024 and sell it today you would earn a total of  28,170  from holding Yatharth Hospital Trauma or generate 84.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	68.99%
Values	Daily Returns

Yatharth Hospital Trauma  vs.  Vidhi Specialty Food

Yatharth Hospital Trauma

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yatharth Hospital Trauma are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Yatharth Hospital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vidhi Specialty Food

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vidhi Specialty Food are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Vidhi Specialty displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yatharth Hospital and Vidhi Specialty

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

The idea behind Yatharth Hospital Trauma and Vidhi Specialty Food 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.