Correlation Between Worldwide Healthcare and Software Circle

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

By analyzing existing cross correlation between Worldwide Healthcare Trust and Software Circle plc, you can compare the effects of market volatilities on Worldwide Healthcare and Software Circle 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 Worldwide Healthcare with a short position of Software Circle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldwide Healthcare and Software Circle.

Diversification Opportunities for Worldwide Healthcare and Software Circle

-0.76

Correlation Coefficient

Worldwide Healthcare  Software Circle

Pay attention - limited upside

The 3 months correlation between Worldwide and Software is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Worldwide Healthcare Trust and Software Circle plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Circle plc and Worldwide Healthcare 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 Worldwide Healthcare Trust are associated (or correlated) with Software Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Circle plc has no effect on the direction of Worldwide Healthcare i.e., Worldwide Healthcare and Software Circle go up and down completely randomly.

Pair Corralation between Worldwide Healthcare and Software Circle

Assuming the 90 days trading horizon Worldwide Healthcare Trust is expected to generate 0.46 times more return on investment than Software Circle. However, Worldwide Healthcare Trust is 2.19 times less risky than Software Circle. It trades about 0.23 of its potential returns per unit of risk. Software Circle plc is currently generating about -0.12 per unit of risk. If you would invest  31,650  in Worldwide Healthcare Trust on August 4, 2025 and sell it today you would earn a total of  4,300  from holding Worldwide Healthcare Trust or generate 13.59% return on investment over 90 days.

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

Worldwide Healthcare Trust  vs.  Software Circle plc

Worldwide Healthcare

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Worldwide Healthcare Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Worldwide Healthcare may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Software Circle plc

Risk-Adjusted Performance

Weakest

Over the last 90 days Software Circle plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Worldwide Healthcare and Software Circle

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

The idea behind Worldwide Healthcare Trust and Software Circle plc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..