Correlation Between Active Health and Church Crawford

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

By analyzing existing cross correlation between Active Health Foods and Church Crawford, you can compare the effects of market volatilities on Active Health and Church Crawford 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 Active Health with a short position of Church Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Active Health and Church Crawford.

Diversification Opportunities for Active Health and Church Crawford

-0.04

Correlation Coefficient

Active Health  Church Crawford

Good diversification

The 3 months correlation between Active and Church is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Active Health Foods and Church Crawford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Crawford and Active 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 Active Health Foods are associated (or correlated) with Church Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Crawford has no effect on the direction of Active Health i.e., Active Health and Church Crawford go up and down completely randomly.

Pair Corralation between Active Health and Church Crawford

Given the investment horizon of 90 days Active Health Foods is expected to under-perform the Church Crawford. But the pink sheet apears to be less risky and, when comparing its historical volatility, Active Health Foods is 1.3 times less risky than Church Crawford. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Church Crawford is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.17  in Church Crawford on September 18, 2024 and sell it today you would earn a total of  0.06  from holding Church Crawford or generate 35.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Active Health Foods  vs.  Church Crawford

Active Health Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Active Health Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Church Crawford

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Church Crawford are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Church Crawford reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Active Health and Church Crawford

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

The idea behind Active Health Foods and Church Crawford 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.