Correlation Between Intercure and Insuline Medical

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

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

Diversification Opportunities for Intercure and Insuline Medical

0.55

Correlation Coefficient

Intercure  Insuline Medical

Very weak diversification

The 3 months correlation between Intercure and Insuline is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Intercure and Insuline Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insuline Medical and Intercure 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 Intercure are associated (or correlated) with Insuline Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insuline Medical has no effect on the direction of Intercure i.e., Intercure and Insuline Medical go up and down completely randomly.

Pair Corralation between Intercure and Insuline Medical

Assuming the 90 days trading horizon Intercure is expected to under-perform the Insuline Medical. But the stock apears to be less risky and, when comparing its historical volatility, Intercure is 1.21 times less risky than Insuline Medical. The stock trades about -0.03 of its potential returns per unit of risk. The Insuline Medical is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  22,200  in Insuline Medical on September 28, 2024 and sell it today you would lose (2,600) from holding Insuline Medical or give up 11.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.87%
Values	Daily Returns

Intercure  vs.  Insuline Medical

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Insuline Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Insuline Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Intercure and Insuline Medical

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

The idea behind Intercure and Insuline Medical 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.