Correlation Between Middlefield Healthcare and IShares Global

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

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

Diversification Opportunities for Middlefield Healthcare and IShares Global

0.88

Correlation Coefficient

Middlefield Healthcare  IShares Global

Very poor diversification

The 3 months correlation between Middlefield and IShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Healthcare Life and iShares Global Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Healthcare and Middlefield Healthcare 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 Middlefield Healthcare Life are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Healthcare has no effect on the direction of Middlefield Healthcare i.e., Middlefield Healthcare and IShares Global go up and down completely randomly.

Pair Corralation between Middlefield Healthcare and IShares Global

Assuming the 90 days horizon Middlefield Healthcare is expected to generate 1.25 times less return on investment than IShares Global. But when comparing it to its historical volatility, Middlefield Healthcare Life is 1.07 times less risky than IShares Global. It trades about 0.01 of its potential returns per unit of risk. iShares Global Healthcare is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6,115  in iShares Global Healthcare on April 20, 2025 and sell it today you would earn a total of  45.00  from holding iShares Global Healthcare or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Middlefield Healthcare Life  vs.  iShares Global Healthcare

Middlefield Healthcare

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Middlefield Healthcare Life are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Middlefield Healthcare is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

iShares Global Healthcare

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Healthcare are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, IShares Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Middlefield Healthcare and IShares Global

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

The idea behind Middlefield Healthcare Life and iShares Global 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.