Correlation Between Aster DM and Yatharth Hospital

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

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

Diversification Opportunities for Aster DM and Yatharth Hospital

0.53

Correlation Coefficient

Aster DM  Yatharth Hospital

Very weak diversification

The 3 months correlation between Aster and Yatharth is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aster DM Healthcare and Yatharth Hospital Trauma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatharth Hospital Trauma and Aster DM 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 Aster DM Healthcare are associated (or correlated) with Yatharth Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatharth Hospital Trauma has no effect on the direction of Aster DM i.e., Aster DM and Yatharth Hospital go up and down completely randomly.

Pair Corralation between Aster DM and Yatharth Hospital

Assuming the 90 days trading horizon Aster DM Healthcare is expected to generate 0.79 times more return on investment than Yatharth Hospital. However, Aster DM Healthcare is 1.26 times less risky than Yatharth Hospital. It trades about 0.15 of its potential returns per unit of risk. Yatharth Hospital Trauma is currently generating about 0.11 per unit of risk. If you would invest  40,685  in Aster DM Healthcare on September 4, 2024 and sell it today you would earn a total of  8,870  from holding Aster DM Healthcare or generate 21.8% return on investment over 90 days.

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

Aster DM Healthcare  vs.  Yatharth Hospital Trauma

Aster DM Healthcare

Risk-Adjusted Performance

12 of 100

Good

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

Yatharth Hospital Trauma

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yatharth Hospital Trauma are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Yatharth Hospital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aster DM and Yatharth Hospital

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

The idea behind Aster DM Healthcare and Yatharth Hospital Trauma 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.

Check out your portfolio center.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .