Correlation Between GPT Healthcare and Hybrid Financial

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

Diversification Opportunities for GPT Healthcare and Hybrid Financial

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between GPT and Hybrid is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GPT Healthcare and Hybrid Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hybrid Financial Services and GPT 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 GPT Healthcare are associated (or correlated) with Hybrid Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hybrid Financial Services has no effect on the direction of GPT Healthcare i.e., GPT Healthcare and Hybrid Financial go up and down completely randomly.

Pair Corralation between GPT Healthcare and Hybrid Financial

Assuming the 90 days trading horizon GPT Healthcare is expected to under-perform the Hybrid Financial. But the stock apears to be less risky and, when comparing its historical volatility, GPT Healthcare is 1.11 times less risky than Hybrid Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Hybrid Financial Services is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,495  in Hybrid Financial Services on October 11, 2024 and sell it today you would lose (40.00) from holding Hybrid Financial Services or give up 2.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy43.94%
ValuesDaily Returns

GPT Healthcare  vs.  Hybrid Financial Services

 Performance 
       Timeline  
GPT Healthcare 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GPT Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, GPT Healthcare is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Hybrid Financial Services 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hybrid Financial Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Hybrid Financial reported solid returns over the last few months and may actually be approaching a breakup point.

GPT Healthcare and Hybrid Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GPT Healthcare and Hybrid Financial

The main advantage of trading using opposite GPT Healthcare and Hybrid Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPT Healthcare position performs unexpectedly, Hybrid Financial 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 Hybrid Financial will offset losses from the drop in Hybrid Financial's long position.
The idea behind GPT Healthcare and Hybrid Financial Services 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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