Correlation Between Universal Health and IKang Healthcare
Can any of the company-specific risk be diversified away by investing in both Universal Health and IKang 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 Universal Health and IKang Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services and IKang Healthcare Group, you can compare the effects of market volatilities on Universal Health and IKang 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 Universal Health with a short position of IKang Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and IKang Healthcare.
Diversification Opportunities for Universal Health and IKang Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and IKang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services and IKang Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IKang Healthcare and Universal Health 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 Universal Health Services are associated (or correlated) with IKang Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IKang Healthcare has no effect on the direction of Universal Health i.e., Universal Health and IKang Healthcare go up and down completely randomly.
Pair Corralation between Universal Health and IKang Healthcare
If you would invest (100.00) in IKang Healthcare Group on January 25, 2024 and sell it today you would earn a total of 100.00 from holding IKang Healthcare Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Universal Health Services vs. IKang Healthcare Group
Performance |
| Timeline |
| Universal Health Services |
| IKang Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Universal Health and IKang Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and IKang Healthcare
The main advantage of trading using opposite Universal Health and IKang Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, IKang 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 IKang Healthcare will offset losses from the drop in IKang Healthcare's long position.| Universal Health vs. The Ensign Group | Universal Health vs. Addus HomeCare | Universal Health vs. Encompass Health Corp | Universal Health vs. Surgery Partners |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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