Correlation Between Yatharth Hospital and Zydus Wellness

Can any of the company-specific risk be diversified away by investing in both Yatharth Hospital and Zydus Wellness 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 Zydus Wellness 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 Zydus Wellness Limited, you can compare the effects of market volatilities on Yatharth Hospital and Zydus Wellness 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 Zydus Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatharth Hospital and Zydus Wellness.

Diversification Opportunities for Yatharth Hospital and Zydus Wellness

-0.03

Correlation Coefficient

Yatharth Hospital  Zydus Wellness

Good diversification

The 3 months correlation between Yatharth and Zydus is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yatharth Hospital Trauma and Zydus Wellness Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zydus Wellness 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 Zydus Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zydus Wellness has no effect on the direction of Yatharth Hospital i.e., Yatharth Hospital and Zydus Wellness go up and down completely randomly.

Pair Corralation between Yatharth Hospital and Zydus Wellness

Assuming the 90 days trading horizon Yatharth Hospital Trauma is expected to generate 1.62 times more return on investment than Zydus Wellness. However, Yatharth Hospital is 1.62 times more volatile than Zydus Wellness Limited. It trades about 0.07 of its potential returns per unit of risk. Zydus Wellness Limited is currently generating about 0.05 per unit of risk. If you would invest  33,385  in Yatharth Hospital Trauma on October 3, 2024 and sell it today you would earn a total of  23,280  from holding Yatharth Hospital Trauma or generate 69.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.62%
Values	Daily Returns

Yatharth Hospital Trauma  vs.  Zydus Wellness Limited

Yatharth Hospital Trauma

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yatharth Hospital Trauma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yatharth Hospital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Zydus Wellness

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zydus Wellness Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Zydus Wellness is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Yatharth Hospital and Zydus Wellness

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

The idea behind Yatharth Hospital Trauma and Zydus Wellness Limited 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.