Correlation Between Yatharth Hospital and Aster DM

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

By analyzing existing cross correlation between Yatharth Hospital Trauma and Aster DM Healthcare, you can compare the effects of market volatilities on Yatharth Hospital and Aster DM 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 Yatharth Hospital with a short position of Aster DM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatharth Hospital and Aster DM.

Diversification Opportunities for Yatharth Hospital and Aster DM

0.53

Correlation Coefficient

Yatharth Hospital  Aster DM

Very weak diversification

The 3 months correlation between Yatharth and Aster is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Yatharth Hospital Trauma and Aster DM Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aster DM Healthcare and Yatharth Hospital 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 Yatharth Hospital Trauma are associated (or correlated) with Aster DM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aster DM Healthcare has no effect on the direction of Yatharth Hospital i.e., Yatharth Hospital and Aster DM go up and down completely randomly.

Pair Corralation between Yatharth Hospital and Aster DM

Assuming the 90 days trading horizon Yatharth Hospital is expected to generate 1.13 times less return on investment than Aster DM. In addition to that, Yatharth Hospital is 1.26 times more volatile than Aster DM Healthcare. It trades about 0.11 of its total potential returns per unit of risk. Aster DM Healthcare is currently generating about 0.15 per unit of volatility. If you would invest  40,685  in Aster DM Healthcare on September 4, 2024 and sell it today you would earn a total of  8,870  from holding Aster DM Healthcare or generate 21.8% return on investment over 90 days.

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

Yatharth Hospital Trauma  vs.  Aster DM Healthcare

Yatharth Hospital Trauma

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yatharth Hospital Trauma are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Yatharth Hospital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aster DM Healthcare

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aster DM Healthcare are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aster DM displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yatharth Hospital and Aster DM

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

The idea behind Yatharth Hospital Trauma and Aster DM Healthcare 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.