Correlation Between Humanica Public and Ekachai Medical

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

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

Diversification Opportunities for Humanica Public and Ekachai Medical

0.71

Correlation Coefficient

Humanica Public  Ekachai Medical

Poor diversification

The 3 months correlation between Humanica and Ekachai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Humanica Public and Ekachai Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekachai Medical Care and Humanica Public 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 Humanica Public are associated (or correlated) with Ekachai Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekachai Medical Care has no effect on the direction of Humanica Public i.e., Humanica Public and Ekachai Medical go up and down completely randomly.

Pair Corralation between Humanica Public and Ekachai Medical

Assuming the 90 days trading horizon Humanica Public is expected to under-perform the Ekachai Medical. In addition to that, Humanica Public is 1.85 times more volatile than Ekachai Medical Care. It trades about -0.21 of its total potential returns per unit of risk. Ekachai Medical Care is currently generating about -0.08 per unit of volatility. If you would invest  675.00  in Ekachai Medical Care on September 15, 2024 and sell it today you would lose (30.00) from holding Ekachai Medical Care or give up 4.44% of portfolio value over 90 days.

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

Humanica Public  vs.  Ekachai Medical Care

Humanica Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Humanica Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ekachai Medical Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekachai Medical Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Ekachai Medical is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Humanica Public and Ekachai Medical

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

The idea behind Humanica Public and Ekachai Medical Care 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 Transaction History module to view history of all your transactions and understand their impact on performance.