Correlation Between Astrana Health and Simulations Plus

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

Diversification Opportunities for Astrana Health and Simulations Plus

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Astrana and Simulations is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Astrana Health and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus and Astrana 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 Astrana Health are associated (or correlated) with Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of Astrana Health i.e., Astrana Health and Simulations Plus go up and down completely randomly.

Pair Corralation between Astrana Health and Simulations Plus

Given the investment horizon of 90 days Astrana Health is expected to generate 1.23 times more return on investment than Simulations Plus. However, Astrana Health is 1.23 times more volatile than Simulations Plus. It trades about 0.02 of its potential returns per unit of risk. Simulations Plus is currently generating about 0.01 per unit of risk. If you would invest  3,853  in Astrana Health on January 20, 2024 and sell it today you would earn a total of  229.00  from holding Astrana Health or generate 5.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy92.32%
ValuesDaily Returns

Astrana Health  vs.  Simulations Plus

 Performance 
       Timeline  
Astrana Health 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days Astrana Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady technical and fundamental indicators, Astrana Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Simulations Plus 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Simulations Plus are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Simulations Plus reported solid returns over the last few months and may actually be approaching a breakup point.

Astrana Health and Simulations Plus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Astrana Health and Simulations Plus

The main advantage of trading using opposite Astrana Health and Simulations Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astrana Health position performs unexpectedly, Simulations Plus 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 Simulations Plus will offset losses from the drop in Simulations Plus' long position.
The idea behind Astrana Health and Simulations Plus 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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