Correlation Between Raffles Medical and Pennant

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

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

Diversification Opportunities for Raffles Medical and Pennant

0.5

Correlation Coefficient

Raffles Medical  Pennant

Very weak diversification

The 3 months correlation between Raffles and Pennant is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Raffles Medical Group and Pennant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pennant Group and Raffles Medical 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 Raffles Medical Group are associated (or correlated) with Pennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pennant Group has no effect on the direction of Raffles Medical i.e., Raffles Medical and Pennant go up and down completely randomly.

Pair Corralation between Raffles Medical and Pennant

If you would invest  74.00  in Raffles Medical Group on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Raffles Medical Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Raffles Medical Group  vs.  Pennant Group

Raffles Medical Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raffles Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Raffles Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pennant Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pennant Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Raffles Medical and Pennant

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

The idea behind Raffles Medical Group and Pennant Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.