Correlation Between Enter Air and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both Enter Air and FEMALE 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 Enter Air and FEMALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and FEMALE HEALTH, you can compare the effects of market volatilities on Enter Air and FEMALE 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 Enter Air with a short position of FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and FEMALE HEALTH.
Diversification Opportunities for Enter Air and FEMALE HEALTH
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enter and FEMALE is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH and Enter Air 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 Enter Air SA are associated (or correlated) with FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of Enter Air i.e., Enter Air and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between Enter Air and FEMALE HEALTH
Assuming the 90 days trading horizon Enter Air SA is expected to generate 1.97 times more return on investment than FEMALE HEALTH. However, Enter Air is 1.97 times more volatile than FEMALE HEALTH. It trades about 0.02 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.02 per unit of risk. If you would invest 1,252 in Enter Air SA on September 2, 2024 and sell it today you would lose (40.00) from holding Enter Air SA or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enter Air SA vs. FEMALE HEALTH
Performance |
| Timeline |
| Enter Air SA |
| FEMALE HEALTH |
Enter Air and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and FEMALE HEALTH
The main advantage of trading using opposite Enter Air and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air position performs unexpectedly, FEMALE 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.The idea behind Enter Air SA and FEMALE HEALTH 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.| FEMALE HEALTH vs. SIVERS SEMICONDUCTORS AB | FEMALE HEALTH vs. Darden Restaurants | FEMALE HEALTH vs. Reliance Steel Aluminum | FEMALE HEALTH vs. Q2M Managementberatung AG |
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 Stocks Directory module to find actively traded stocks across global markets.
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