Correlation Between Sanbo Hospital and PKU HealthCare

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Can any of the company-specific risk be diversified away by investing in both Sanbo Hospital and PKU 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 Sanbo Hospital and PKU HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanbo Hospital Management and PKU HealthCare Corp, you can compare the effects of market volatilities on Sanbo Hospital and PKU 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 Sanbo Hospital with a short position of PKU HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanbo Hospital and PKU HealthCare.

Diversification Opportunities for Sanbo Hospital and PKU HealthCare

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Sanbo and PKU is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sanbo Hospital Management and PKU HealthCare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKU HealthCare Corp and Sanbo 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 Sanbo Hospital Management are associated (or correlated) with PKU HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKU HealthCare Corp has no effect on the direction of Sanbo Hospital i.e., Sanbo Hospital and PKU HealthCare go up and down completely randomly.

Pair Corralation between Sanbo Hospital and PKU HealthCare

Assuming the 90 days trading horizon Sanbo Hospital Management is expected to generate 1.75 times more return on investment than PKU HealthCare. However, Sanbo Hospital is 1.75 times more volatile than PKU HealthCare Corp. It trades about 0.09 of its potential returns per unit of risk. PKU HealthCare Corp is currently generating about -0.08 per unit of risk. If you would invest  4,417  in Sanbo Hospital Management on August 28, 2024 and sell it today you would earn a total of  278.00  from holding Sanbo Hospital Management or generate 6.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Sanbo Hospital Management  vs.  PKU HealthCare Corp

 Performance 
       Timeline  
Sanbo Hospital Management 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Sanbo Hospital Management are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sanbo Hospital sustained solid returns over the last few months and may actually be approaching a breakup point.
PKU HealthCare Corp 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PKU HealthCare Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PKU HealthCare sustained solid returns over the last few months and may actually be approaching a breakup point.

Sanbo Hospital and PKU HealthCare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sanbo Hospital and PKU HealthCare

The main advantage of trading using opposite Sanbo Hospital and PKU HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanbo Hospital position performs unexpectedly, PKU 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 PKU HealthCare will offset losses from the drop in PKU HealthCare's long position.
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The idea behind Sanbo Hospital Management and PKU HealthCare Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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