Correlation Between Global Health and Medplus Health

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

By analyzing existing cross correlation between Global Health Limited and Medplus Health Services, you can compare the effects of market volatilities on Global Health and Medplus Health 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 Global Health with a short position of Medplus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Medplus Health.

Diversification Opportunities for Global Health and Medplus Health

0.02

Correlation Coefficient

Global Health  Medplus Health

Significant diversification

The 3 months correlation between Global and Medplus is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global Health Limited and Medplus Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medplus Health Services and Global 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 Global Health Limited are associated (or correlated) with Medplus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medplus Health Services has no effect on the direction of Global Health i.e., Global Health and Medplus Health go up and down completely randomly.

Pair Corralation between Global Health and Medplus Health

Assuming the 90 days trading horizon Global Health is expected to generate 1.44 times less return on investment than Medplus Health. But when comparing it to its historical volatility, Global Health Limited is 1.31 times less risky than Medplus Health. It trades about 0.08 of its potential returns per unit of risk. Medplus Health Services is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  79,310  in Medplus Health Services on April 25, 2025 and sell it today you would earn a total of  9,130  from holding Medplus Health Services or generate 11.51% return on investment over 90 days.

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

Global Health Limited  vs.  Medplus Health Services

Global Health Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Health Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Global Health may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Medplus Health Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medplus Health Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Medplus Health may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Global Health and Medplus Health

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

The idea behind Global Health Limited and Medplus Health Services 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.