Correlation Between Picton Mahoney and Harvest Healthcare

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

By analyzing existing cross correlation between Picton Mahoney Fortified and Harvest Healthcare Leaders, you can compare the effects of market volatilities on Picton Mahoney and Harvest 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 Picton Mahoney with a short position of Harvest Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picton Mahoney and Harvest Healthcare.

Diversification Opportunities for Picton Mahoney and Harvest Healthcare

-0.74

Correlation Coefficient

Picton Mahoney  Harvest Healthcare

Pay attention - limited upside

The 3 months correlation between Picton and Harvest is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Picton Mahoney Fortified and Harvest Healthcare Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Healthcare and Picton Mahoney 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 Picton Mahoney Fortified are associated (or correlated) with Harvest Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Healthcare has no effect on the direction of Picton Mahoney i.e., Picton Mahoney and Harvest Healthcare go up and down completely randomly.

Pair Corralation between Picton Mahoney and Harvest Healthcare

Assuming the 90 days trading horizon Picton Mahoney Fortified is expected to generate 0.99 times more return on investment than Harvest Healthcare. However, Picton Mahoney Fortified is 1.01 times less risky than Harvest Healthcare. It trades about 0.16 of its potential returns per unit of risk. Harvest Healthcare Leaders is currently generating about -0.17 per unit of risk. If you would invest  1,745  in Picton Mahoney Fortified on September 4, 2024 and sell it today you would earn a total of  134.00  from holding Picton Mahoney Fortified or generate 7.68% return on investment over 90 days.

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

Picton Mahoney Fortified  vs.  Harvest Healthcare Leaders

Picton Mahoney Fortified

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Picton Mahoney Fortified are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Picton Mahoney may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Harvest Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvest Healthcare Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Picton Mahoney and Harvest Healthcare

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

The idea behind Picton Mahoney Fortified and Harvest Healthcare Leaders 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.