Correlation Between Grand Pacific and SS Healthcare
Can any of the company-specific risk be diversified away by investing in both Grand Pacific and SS Healthcare 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 Grand Pacific and SS Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Pacific Petrochemical and SS Healthcare Holding, you can compare the effects of market volatilities on Grand Pacific and SS Healthcare 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 Grand Pacific with a short position of SS Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Pacific and SS Healthcare.
Diversification Opportunities for Grand Pacific and SS Healthcare
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grand and 4198 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grand Pacific Petrochemical and SS Healthcare Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS Healthcare Holding and Grand Pacific 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 Grand Pacific Petrochemical are associated (or correlated) with SS Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS Healthcare Holding has no effect on the direction of Grand Pacific i.e., Grand Pacific and SS Healthcare go up and down completely randomly.
Pair Corralation between Grand Pacific and SS Healthcare
Assuming the 90 days trading horizon Grand Pacific Petrochemical is expected to generate 0.07 times more return on investment than SS Healthcare. However, Grand Pacific Petrochemical is 14.74 times less risky than SS Healthcare. It trades about -0.07 of its potential returns per unit of risk. SS Healthcare Holding is currently generating about -0.13 per unit of risk. If you would invest 2,235 in Grand Pacific Petrochemical on November 3, 2024 and sell it today you would lose (5.00) from holding Grand Pacific Petrochemical or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Pacific Petrochemical vs. SS Healthcare Holding
Performance |
| Timeline |
| Grand Pacific Petroc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SS Healthcare Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Grand Pacific and SS Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Pacific and SS Healthcare
The main advantage of trading using opposite Grand Pacific and SS Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Pacific position performs unexpectedly, SS Healthcare 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 SS Healthcare will offset losses from the drop in SS Healthcare's long position.The idea behind Grand Pacific Petrochemical and SS Healthcare Holding 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.Check out your portfolio center.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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