Correlation Between Harrow Health and Automatic Data

Can any of the company-specific risk be diversified away by investing in both Harrow Health and Automatic Data 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 Harrow Health and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harrow Health 8625 and Automatic Data Processing, you can compare the effects of market volatilities on Harrow Health and Automatic Data 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 Harrow Health with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harrow Health and Automatic Data.

Diversification Opportunities for Harrow Health and Automatic Data

-0.83

Correlation Coefficient

Harrow Health  Automatic Data

Pay attention - limited upside

The 3 months correlation between Harrow and Automatic is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Harrow Health 8625 and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Harrow 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 Harrow Health 8625 are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Harrow Health i.e., Harrow Health and Automatic Data go up and down completely randomly.

Pair Corralation between Harrow Health and Automatic Data

Assuming the 90 days horizon Harrow Health 8625 is expected to generate 0.16 times more return on investment than Automatic Data. However, Harrow Health 8625 is 6.42 times less risky than Automatic Data. It trades about 0.03 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.16 per unit of risk. If you would invest  2,558  in Harrow Health 8625 on September 6, 2025 and sell it today you would earn a total of  3.00  from holding Harrow Health 8625 or generate 0.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	40.63%
Values	Daily Returns

Harrow Health 8625  vs.  Automatic Data Processing

Harrow Health 8625

Risk-Adjusted Performance

Weak

Over the last 90 days Harrow Health 8625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Harrow Health is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Automatic Data Processing

Risk-Adjusted Performance

Weakest

Over the last 90 days Automatic Data Processing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Harrow Health and Automatic Data

The main advantage of trading using opposite Harrow Health and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harrow Health position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.

The idea behind Harrow Health 8625 and Automatic Data Processing 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.