Correlation Between NetSol Technologies and American Healthcare

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

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

Diversification Opportunities for NetSol Technologies and American Healthcare

-0.7

Correlation Coefficient

NetSol Technologies  American Healthcare

Excellent diversification

The 3 months correlation between NetSol and American is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and American Healthcare REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Healthcare REIT, and NetSol Technologies 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 NetSol Technologies are associated (or correlated) with American Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Healthcare REIT, has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and American Healthcare go up and down completely randomly.

Pair Corralation between NetSol Technologies and American Healthcare

Given the investment horizon of 90 days NetSol Technologies is expected to generate 0.9 times more return on investment than American Healthcare. However, NetSol Technologies is 1.11 times less risky than American Healthcare. It trades about 0.05 of its potential returns per unit of risk. American Healthcare REIT, is currently generating about -0.03 per unit of risk. If you would invest  256.00  in NetSol Technologies on September 21, 2024 and sell it today you would earn a total of  3.00  from holding NetSol Technologies or generate 1.17% return on investment over 90 days.

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

NetSol Technologies  vs.  American Healthcare REIT,

NetSol Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

American Healthcare REIT,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Healthcare REIT, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, American Healthcare is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with NetSol Technologies and American Healthcare

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

The idea behind NetSol Technologies and American Healthcare REIT, 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.