Correlation Between Healixa and Healthcare Triangle

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

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

Diversification Opportunities for Healixa and Healthcare Triangle

-0.6

Correlation Coefficient

Healixa  Healthcare Triangle

Excellent diversification

The 3 months correlation between Healixa and Healthcare is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Healixa and Healthcare Triangle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Triangle and Healixa 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 Healixa are associated (or correlated) with Healthcare Triangle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Triangle has no effect on the direction of Healixa i.e., Healixa and Healthcare Triangle go up and down completely randomly.

Pair Corralation between Healixa and Healthcare Triangle

Given the investment horizon of 90 days Healixa is expected to generate 26.88 times less return on investment than Healthcare Triangle. But when comparing it to its historical volatility, Healixa is 1.59 times less risky than Healthcare Triangle. It trades about 0.01 of its potential returns per unit of risk. Healthcare Triangle is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Healthcare Triangle on September 17, 2024 and sell it today you would earn a total of  45.00  from holding Healthcare Triangle or generate 100.0% return on investment over 90 days.

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

Healixa  vs.  Healthcare Triangle

Healixa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healixa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Healixa is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Healthcare Triangle

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Triangle are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Healthcare Triangle demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Healixa and Healthcare Triangle

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

The idea behind Healixa and Healthcare Triangle 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.