Correlation Between Wesure Global and Identi Healthcare
Can any of the company-specific risk be diversified away by investing in both Wesure Global and Identi 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 Wesure Global and Identi Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesure Global Tech and Identi Healthcare, you can compare the effects of market volatilities on Wesure Global and Identi 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 Wesure Global with a short position of Identi Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesure Global and Identi Healthcare.
Diversification Opportunities for Wesure Global and Identi Healthcare
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wesure and Identi is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wesure Global Tech and Identi Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identi Healthcare and Wesure Global 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 Wesure Global Tech are associated (or correlated) with Identi Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identi Healthcare has no effect on the direction of Wesure Global i.e., Wesure Global and Identi Healthcare go up and down completely randomly.
Pair Corralation between Wesure Global and Identi Healthcare
Assuming the 90 days trading horizon Wesure Global is expected to generate 13.32 times less return on investment than Identi Healthcare. But when comparing it to its historical volatility, Wesure Global Tech is 6.29 times less risky than Identi Healthcare. It trades about 0.19 of its potential returns per unit of risk. Identi Healthcare is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 18,260 in Identi Healthcare on October 24, 2024 and sell it today you would earn a total of 35,810 from holding Identi Healthcare or generate 196.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesure Global Tech vs. Identi Healthcare
Performance |
| Timeline |
| Wesure Global Tech |
| Identi Healthcare |
Wesure Global and Identi Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesure Global and Identi Healthcare
The main advantage of trading using opposite Wesure Global and Identi Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesure Global position performs unexpectedly, Identi 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 Identi Healthcare will offset losses from the drop in Identi Healthcare's long position.| Wesure Global vs. Global Knafaim Leasing | Wesure Global vs. IDI Insurance | Wesure Global vs. B Communications | Wesure Global vs. Suny Cellular Communication |
| Identi Healthcare vs. Wesure Global Tech | Identi Healthcare vs. Nrgene Technologies | Identi Healthcare vs. Priortech | Identi Healthcare vs. Iargento Hi Tech |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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