Correlation Between Microchip Technology and Primary Health

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

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

Diversification Opportunities for Microchip Technology and Primary Health

-0.19

Correlation Coefficient

Microchip Technology  Primary Health

Good diversification

The 3 months correlation between Microchip and Primary is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Microchip Technology and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties and Microchip Technology 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 Microchip Technology are associated (or correlated) with Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Microchip Technology i.e., Microchip Technology and Primary Health go up and down completely randomly.

Pair Corralation between Microchip Technology and Primary Health

Assuming the 90 days trading horizon Microchip Technology is expected to generate 2.36 times more return on investment than Primary Health. However, Microchip Technology is 2.36 times more volatile than Primary Health Properties. It trades about 0.07 of its potential returns per unit of risk. Primary Health Properties is currently generating about -0.15 per unit of risk. If you would invest  6,039  in Microchip Technology on May 18, 2025 and sell it today you would earn a total of  595.00  from holding Microchip Technology or generate 9.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Microchip Technology  vs.  Primary Health Properties

Microchip Technology

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Microchip Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Microchip Technology may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Primary Health Properties

Risk-Adjusted Performance

Weakest

Over the last 90 days Primary Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Microchip Technology and Primary Health

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

The idea behind Microchip Technology and Primary Health Properties 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.