Correlation Between Global Health and Shivalik Bimetal

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

By analyzing existing cross correlation between Global Health Limited and Shivalik Bimetal Controls, you can compare the effects of market volatilities on Global Health and Shivalik Bimetal 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 Global Health with a short position of Shivalik Bimetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Shivalik Bimetal.

Diversification Opportunities for Global Health and Shivalik Bimetal

-0.43

Correlation Coefficient

Global Health  Shivalik Bimetal

Very good diversification

The 3 months correlation between Global and Shivalik is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Global Health Limited and Shivalik Bimetal Controls in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shivalik Bimetal Controls and Global Health 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 Global Health Limited are associated (or correlated) with Shivalik Bimetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shivalik Bimetal Controls has no effect on the direction of Global Health i.e., Global Health and Shivalik Bimetal go up and down completely randomly.

Pair Corralation between Global Health and Shivalik Bimetal

Assuming the 90 days trading horizon Global Health is expected to generate 11.51 times less return on investment than Shivalik Bimetal. But when comparing it to its historical volatility, Global Health Limited is 1.17 times less risky than Shivalik Bimetal. It trades about 0.0 of its potential returns per unit of risk. Shivalik Bimetal Controls is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  57,225  in Shivalik Bimetal Controls on September 24, 2024 and sell it today you would earn a total of  505.00  from holding Shivalik Bimetal Controls or generate 0.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Global Health Limited  vs.  Shivalik Bimetal Controls

Global Health Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Health Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Global Health is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Shivalik Bimetal Controls

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shivalik Bimetal Controls are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Shivalik Bimetal is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Health and Shivalik Bimetal

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

The idea behind Global Health Limited and Shivalik Bimetal Controls 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.