Correlation Between Storage Drop and Identi Healthcare

Can any of the company-specific risk be diversified away by investing in both Storage Drop 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 Storage Drop and Identi Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Storage Drop Storage and Identi Healthcare, you can compare the effects of market volatilities on Storage Drop 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 Storage Drop with a short position of Identi Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storage Drop and Identi Healthcare.

Diversification Opportunities for Storage Drop and Identi Healthcare

-0.76

Correlation Coefficient

Storage Drop  Identi Healthcare

Pay attention - limited upside

The 3 months correlation between Storage and Identi is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Storage Drop Storage and Identi Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identi Healthcare and Storage Drop 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 Storage Drop Storage 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 Storage Drop i.e., Storage Drop and Identi Healthcare go up and down completely randomly.

Pair Corralation between Storage Drop and Identi Healthcare

Assuming the 90 days trading horizon Storage Drop Storage is expected to generate 1.2 times more return on investment than Identi Healthcare. However, Storage Drop is 1.2 times more volatile than Identi Healthcare. It trades about 0.28 of its potential returns per unit of risk. Identi Healthcare is currently generating about -0.28 per unit of risk. If you would invest  5,590  in Storage Drop Storage on February 19, 2024 and sell it today you would earn a total of  3,210  from holding Storage Drop Storage or generate 57.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Storage Drop Storage  vs.  Identi Healthcare

Storage Drop Storage

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Storage Drop Storage are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Storage Drop sustained solid returns over the last few months and may actually be approaching a breakup point.

Identi Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Identi Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Storage Drop and Identi Healthcare

The main advantage of trading using opposite Storage Drop and Identi Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storage Drop 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.

The idea behind Storage Drop Storage and Identi Healthcare 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.