Correlation Between FIDSON HEALTHCARE and ACCESS HOLDINGS

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

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

Diversification Opportunities for FIDSON HEALTHCARE and ACCESS HOLDINGS

0.13

Correlation Coefficient

FIDSON HEALTHCARE  ACCESS HOLDINGS

Average diversification

The 3 months correlation between FIDSON and ACCESS is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding FIDSON HEALTHCARE PLC and ACCESS HOLDINGS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCESS HOLDINGS PLC and FIDSON HEALTHCARE 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 FIDSON HEALTHCARE PLC are associated (or correlated) with ACCESS HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCESS HOLDINGS PLC has no effect on the direction of FIDSON HEALTHCARE i.e., FIDSON HEALTHCARE and ACCESS HOLDINGS go up and down completely randomly.

Pair Corralation between FIDSON HEALTHCARE and ACCESS HOLDINGS

Assuming the 90 days trading horizon FIDSON HEALTHCARE is expected to generate 1.99 times less return on investment than ACCESS HOLDINGS. In addition to that, FIDSON HEALTHCARE is 1.46 times more volatile than ACCESS HOLDINGS PLC. It trades about 0.07 of its total potential returns per unit of risk. ACCESS HOLDINGS PLC is currently generating about 0.19 per unit of volatility. If you would invest  1,870  in ACCESS HOLDINGS PLC on September 12, 2024 and sell it today you would earn a total of  545.00  from holding ACCESS HOLDINGS PLC or generate 29.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

FIDSON HEALTHCARE PLC  vs.  ACCESS HOLDINGS PLC

FIDSON HEALTHCARE PLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FIDSON HEALTHCARE PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, FIDSON HEALTHCARE sustained solid returns over the last few months and may actually be approaching a breakup point.

ACCESS HOLDINGS PLC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ACCESS HOLDINGS PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, ACCESS HOLDINGS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIDSON HEALTHCARE and ACCESS HOLDINGS

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

The idea behind FIDSON HEALTHCARE PLC and ACCESS HOLDINGS PLC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.