Correlation Between Cairn Homes and Primary Health

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

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

Diversification Opportunities for Cairn Homes and Primary Health

-0.14

Correlation Coefficient

Cairn Homes  Primary Health

Good diversification

The 3 months correlation between Cairn and Primary is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC 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 Cairn Homes 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 Cairn Homes PLC 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 Cairn Homes i.e., Cairn Homes and Primary Health go up and down completely randomly.

Pair Corralation between Cairn Homes and Primary Health

Assuming the 90 days trading horizon Cairn Homes PLC is expected to generate 2.0 times more return on investment than Primary Health. However, Cairn Homes is 2.0 times more volatile than Primary Health Properties. It trades about 0.06 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  17,340  in Cairn Homes PLC on May 19, 2025 and sell it today you would earn a total of  1,120  from holding Cairn Homes PLC or generate 6.46% return on investment over 90 days.

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

Cairn Homes PLC  vs.  Primary Health Properties

Cairn Homes PLC

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Cairn Homes PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Cairn Homes 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 uncertain 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 Cairn Homes and Primary Health

The main advantage of trading using opposite Cairn Homes and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes 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 Cairn Homes PLC 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 Valuation module to check real value of public entities based on technical and fundamental data.