Correlation Between Natural Health and D MARKET
Can any of the company-specific risk be diversified away by investing in both Natural Health and D MARKET 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 Natural Health and D MARKET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and D MARKET Electronic Services, you can compare the effects of market volatilities on Natural Health and D MARKET 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 Natural Health with a short position of D MARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and D MARKET.
Diversification Opportunities for Natural Health and D MARKET
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Natural and HEPS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and D MARKET Electronic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D MARKET Electronic and Natural 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 Natural Health Trend are associated (or correlated) with D MARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D MARKET Electronic has no effect on the direction of Natural Health i.e., Natural Health and D MARKET go up and down completely randomly.
Pair Corralation between Natural Health and D MARKET
Given the investment horizon of 90 days Natural Health Trend is expected to under-perform the D MARKET. But the stock apears to be less risky and, when comparing its historical volatility, Natural Health Trend is 1.39 times less risky than D MARKET. The stock trades about -0.07 of its potential returns per unit of risk. The D MARKET Electronic Services is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 281.00 in D MARKET Electronic Services on June 4, 2025 and sell it today you would lose (9.50) from holding D MARKET Electronic Services or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trend vs. D MARKET Electronic Services
Performance |
| Timeline |
| Natural Health Trend |
| D MARKET Electronic |
Natural Health and D MARKET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and D MARKET
The main advantage of trading using opposite Natural Health and D MARKET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, D MARKET 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 D MARKET will offset losses from the drop in D MARKET's long position.| Natural Health vs. 1StdibsCom | Natural Health vs. Hour Loop | Natural Health vs. Liquidity Services | Natural Health vs. Argan Inc |
| D MARKET vs. ATRenew Inc DRC | D MARKET vs. Baozun Inc | D MARKET vs. Hour Loop | D MARKET vs. LightInTheBox Holding Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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