Correlation Between EPSILON HEALTHCARE and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and MEDICAL FACILITIES 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 EPSILON HEALTHCARE and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPSILON HEALTHCARE LTD and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on EPSILON HEALTHCARE and MEDICAL FACILITIES 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 EPSILON HEALTHCARE with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and MEDICAL FACILITIES.
Diversification Opportunities for EPSILON HEALTHCARE and MEDICAL FACILITIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and MEDICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and EPSILON 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 EPSILON HEALTHCARE LTD are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and MEDICAL FACILITIES
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 5.51 times more return on investment than MEDICAL FACILITIES. However, EPSILON HEALTHCARE is 5.51 times more volatile than MEDICAL FACILITIES NEW. It trades about 0.05 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.07 per unit of risk. If you would invest 1.15 in EPSILON HEALTHCARE LTD on September 22, 2024 and sell it today you would lose (0.40) from holding EPSILON HEALTHCARE LTD or give up 34.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| MEDICAL FACILITIES NEW |
EPSILON HEALTHCARE and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and MEDICAL FACILITIES
The main advantage of trading using opposite EPSILON HEALTHCARE and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| EPSILON HEALTHCARE vs. Public Storage | EPSILON HEALTHCARE vs. Datalogic SpA | EPSILON HEALTHCARE vs. Arrow Electronics | EPSILON HEALTHCARE vs. Nucletron Electronic Aktiengesellschaft |
| MEDICAL FACILITIES vs. Cardinal Health | MEDICAL FACILITIES vs. National Health Investors | MEDICAL FACILITIES vs. FEMALE HEALTH | MEDICAL FACILITIES vs. EPSILON HEALTHCARE LTD |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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