Correlation Between Supurva Healthcare and Roth CH

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

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

Diversification Opportunities for Supurva Healthcare and Roth CH

0.74

Correlation Coefficient

Supurva Healthcare  Roth CH

Poor diversification

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

Pair Corralation between Supurva Healthcare and Roth CH

Given the investment horizon of 90 days Supurva Healthcare is expected to generate 1.17 times less return on investment than Roth CH. In addition to that, Supurva Healthcare is 1.66 times more volatile than Roth CH Acquisition. It trades about 0.21 of its total potential returns per unit of risk. Roth CH Acquisition is currently generating about 0.4 per unit of volatility. If you would invest  4.65  in Roth CH Acquisition on September 26, 2024 and sell it today you would earn a total of  35.35  from holding Roth CH Acquisition or generate 760.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	70.73%
Values	Daily Returns

Supurva Healthcare Group  vs.  Roth CH Acquisition

Supurva Healthcare

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Supurva Healthcare Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Supurva Healthcare showed solid returns over the last few months and may actually be approaching a breakup point.

Roth CH Acquisition

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Roth CH Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent essential indicators, Roth CH showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Supurva Healthcare and Roth CH

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

The idea behind Supurva Healthcare Group and Roth CH Acquisition 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.