Correlation Between Patrangsit Healthcare and Healthlead Public

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

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

Diversification Opportunities for Patrangsit Healthcare and Healthlead Public

-0.54

Correlation Coefficient

Patrangsit Healthcare  Healthlead Public

Excellent diversification

The 3 months correlation between Patrangsit and Healthlead is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Patrangsit Healthcare Group and Healthlead Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthlead Public and Patrangsit Healthcare 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 Patrangsit Healthcare Group are associated (or correlated) with Healthlead Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthlead Public has no effect on the direction of Patrangsit Healthcare i.e., Patrangsit Healthcare and Healthlead Public go up and down completely randomly.

Pair Corralation between Patrangsit Healthcare and Healthlead Public

Assuming the 90 days trading horizon Patrangsit Healthcare Group is expected to under-perform the Healthlead Public. But the stock apears to be less risky and, when comparing its historical volatility, Patrangsit Healthcare Group is 1.25 times less risky than Healthlead Public. The stock trades about -0.06 of its potential returns per unit of risk. The Healthlead Public is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  800.00  in Healthlead Public on September 12, 2024 and sell it today you would earn a total of  190.00  from holding Healthlead Public or generate 23.75% return on investment over 90 days.

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

Patrangsit Healthcare Group  vs.  Healthlead Public

Patrangsit Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Healthlead Public

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Healthlead Public are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Healthlead Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Patrangsit Healthcare and Healthlead Public

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

The idea behind Patrangsit Healthcare Group and Healthlead Public 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.