Correlation Between EPSILON HEALTHCARE and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and BJs Wholesale 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 BJs Wholesale 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 BJs Wholesale Club, you can compare the effects of market volatilities on EPSILON HEALTHCARE and BJs Wholesale 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 BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and BJs Wholesale.
Diversification Opportunities for EPSILON HEALTHCARE and BJs Wholesale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and BJs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club 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 BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and BJs Wholesale go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and BJs Wholesale
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 8.59 times more return on investment than BJs Wholesale. However, EPSILON HEALTHCARE is 8.59 times more volatile than BJs Wholesale Club. It trades about 0.05 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.04 per unit of risk. If you would invest 1.20 in EPSILON HEALTHCARE LTD on September 2, 2024 and sell it today you would lose (0.45) from holding EPSILON HEALTHCARE LTD or give up 37.5% 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. BJs Wholesale Club
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| BJs Wholesale Club |
EPSILON HEALTHCARE and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and BJs Wholesale
The main advantage of trading using opposite EPSILON HEALTHCARE and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale's long position.| EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. Origin Agritech | EPSILON HEALTHCARE vs. Identiv | EPSILON HEALTHCARE vs. INTUITIVE SURGICAL |
| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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