Correlation Between Sakar Healthcare and Power Finance
Can any of the company-specific risk be diversified away by investing in both Sakar Healthcare and Power Finance 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 Sakar Healthcare and Power Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sakar Healthcare Limited and Power Finance, you can compare the effects of market volatilities on Sakar Healthcare and Power Finance 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 Sakar Healthcare with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sakar Healthcare and Power Finance.
Diversification Opportunities for Sakar Healthcare and Power Finance
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sakar and Power is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sakar Healthcare Limited and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance and Sakar 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 Sakar Healthcare Limited are associated (or correlated) with Power Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Finance has no effect on the direction of Sakar Healthcare i.e., Sakar Healthcare and Power Finance go up and down completely randomly.
Pair Corralation between Sakar Healthcare and Power Finance
Assuming the 90 days trading horizon Sakar Healthcare Limited is expected to under-perform the Power Finance. But the stock apears to be less risky and, when comparing its historical volatility, Sakar Healthcare Limited is 1.74 times less risky than Power Finance. The stock trades about -0.24 of its potential returns per unit of risk. The Power Finance is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 44,650 in Power Finance on November 5, 2024 and sell it today you would lose (2,400) from holding Power Finance or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sakar Healthcare Limited vs. Power Finance
Performance |
| Timeline |
| Sakar Healthcare |
| Power Finance |
Sakar Healthcare and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sakar Healthcare and Power Finance
The main advantage of trading using opposite Sakar Healthcare and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sakar Healthcare position performs unexpectedly, Power Finance 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 Power Finance will offset losses from the drop in Power Finance's long position.| Sakar Healthcare vs. Music Broadcast Limited | Sakar Healthcare vs. Elin Electronics Limited | Sakar Healthcare vs. Total Transport Systems | Sakar Healthcare vs. Hexa Tradex Limited |
| Power Finance vs. Silgo Retail Limited | Power Finance vs. Som Distilleries Breweries | Power Finance vs. Praxis Home Retail | Power Finance vs. DJ Mediaprint Logistics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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