Correlation Between Fortis Healthcare and Akums Drugs

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

Diversification Opportunities for Fortis Healthcare and Akums Drugs

-0.85
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Fortis and Akums is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fortis Healthcare Limited and Akums Drugs and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akums Drugs and Fortis 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 Fortis Healthcare Limited are associated (or correlated) with Akums Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akums Drugs has no effect on the direction of Fortis Healthcare i.e., Fortis Healthcare and Akums Drugs go up and down completely randomly.

Pair Corralation between Fortis Healthcare and Akums Drugs

Assuming the 90 days trading horizon Fortis Healthcare Limited is expected to generate 0.73 times more return on investment than Akums Drugs. However, Fortis Healthcare Limited is 1.37 times less risky than Akums Drugs. It trades about 0.13 of its potential returns per unit of risk. Akums Drugs and is currently generating about -0.1 per unit of risk. If you would invest  64,560  in Fortis Healthcare Limited on September 28, 2024 and sell it today you would earn a total of  2,660  from holding Fortis Healthcare Limited or generate 4.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fortis Healthcare Limited  vs.  Akums Drugs and

 Performance 
       Timeline  
Fortis Healthcare 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Fortis Healthcare Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fortis Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Akums Drugs 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Akums Drugs and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Fortis Healthcare and Akums Drugs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fortis Healthcare and Akums Drugs

The main advantage of trading using opposite Fortis Healthcare and Akums Drugs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortis Healthcare position performs unexpectedly, Akums Drugs 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 Akums Drugs will offset losses from the drop in Akums Drugs' long position.
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The idea behind Fortis Healthcare Limited and Akums Drugs and 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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