Correlation Between Max Financial and Fortis Healthcare

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

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

Diversification Opportunities for Max Financial and Fortis Healthcare

0.92

Correlation Coefficient

Max Financial  Fortis Healthcare

Almost no diversification

The 3 months correlation between Max and Fortis is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and Fortis Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Healthcare and Max Financial 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 Max Financial Services are associated (or correlated) with Fortis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Healthcare has no effect on the direction of Max Financial i.e., Max Financial and Fortis Healthcare go up and down completely randomly.

Pair Corralation between Max Financial and Fortis Healthcare

Assuming the 90 days trading horizon Max Financial Services is expected to generate 0.7 times more return on investment than Fortis Healthcare. However, Max Financial Services is 1.43 times less risky than Fortis Healthcare. It trades about 0.28 of its potential returns per unit of risk. Fortis Healthcare Limited is currently generating about 0.18 per unit of risk. If you would invest  123,740  in Max Financial Services on April 20, 2025 and sell it today you would earn a total of  30,170  from holding Max Financial Services or generate 24.38% return on investment over 90 days.

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

Max Financial Services  vs.  Fortis Healthcare Limited

Max Financial Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Max Financial Services are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Max Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fortis Healthcare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortis Healthcare Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fortis Healthcare sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Max Financial and Fortis Healthcare

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

The idea behind Max Financial Services and Fortis Healthcare Limited 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.