Correlation Between Wesana Health and Therapeutic Solutions

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

By analyzing existing cross correlation between Wesana Health Holdings and Therapeutic Solutions International, you can compare the effects of market volatilities on Wesana Health and Therapeutic Solutions 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 Wesana Health with a short position of Therapeutic Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesana Health and Therapeutic Solutions.

Diversification Opportunities for Wesana Health and Therapeutic Solutions

0.21

Correlation Coefficient

Wesana Health  Therapeutic Solutions

Modest diversification

The 3 months correlation between Wesana and Therapeutic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Wesana Health Holdings and Therapeutic Solutions Internat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Therapeutic Solutions and Wesana Health 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 Wesana Health Holdings are associated (or correlated) with Therapeutic Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Therapeutic Solutions has no effect on the direction of Wesana Health i.e., Wesana Health and Therapeutic Solutions go up and down completely randomly.

Pair Corralation between Wesana Health and Therapeutic Solutions

If you would invest  0.79  in Wesana Health Holdings on September 4, 2024 and sell it today you would lose (0.18) from holding Wesana Health Holdings or give up 22.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Wesana Health Holdings  vs.  Therapeutic Solutions Internat

Wesana Health Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wesana Health Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Wesana Health reported solid returns over the last few months and may actually be approaching a breakup point.

Therapeutic Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Therapeutic Solutions International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Therapeutic Solutions is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Wesana Health and Therapeutic Solutions

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

The idea behind Wesana Health Holdings and Therapeutic Solutions International 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.