Correlation Between EPSILON HEALTHCARE and WINDSTREAM HLDGS
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and WINDSTREAM HLDGS 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 WINDSTREAM HLDGS 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 WINDSTREAM HLDGS, you can compare the effects of market volatilities on EPSILON HEALTHCARE and WINDSTREAM HLDGS 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 WINDSTREAM HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and WINDSTREAM HLDGS.
Diversification Opportunities for EPSILON HEALTHCARE and WINDSTREAM HLDGS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and WINDSTREAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and WINDSTREAM HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINDSTREAM HLDGS 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 WINDSTREAM HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINDSTREAM HLDGS has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and WINDSTREAM HLDGS go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and WINDSTREAM HLDGS
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 1.03 times more return on investment than WINDSTREAM HLDGS. However, EPSILON HEALTHCARE is 1.03 times more volatile than WINDSTREAM HLDGS. It trades about 0.05 of its potential returns per unit of risk. WINDSTREAM HLDGS is currently generating about 0.04 per unit of risk. If you would invest 0.85 in EPSILON HEALTHCARE LTD on November 8, 2024 and sell it today you would lose (0.10) from holding EPSILON HEALTHCARE LTD or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. WINDSTREAM HLDGS
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| WINDSTREAM HLDGS |
EPSILON HEALTHCARE and WINDSTREAM HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and WINDSTREAM HLDGS
The main advantage of trading using opposite EPSILON HEALTHCARE and WINDSTREAM HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, WINDSTREAM HLDGS 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 WINDSTREAM HLDGS will offset losses from the drop in WINDSTREAM HLDGS's long position.| EPSILON HEALTHCARE vs. Laureate Education | EPSILON HEALTHCARE vs. betterU Education Corp | EPSILON HEALTHCARE vs. EEDUCATION ALBERT AB | EPSILON HEALTHCARE vs. Mount Gibson Iron |
| WINDSTREAM HLDGS vs. SIVERS SEMICONDUCTORS AB | WINDSTREAM HLDGS vs. NorAm Drilling AS | WINDSTREAM HLDGS vs. Volkswagen AG | WINDSTREAM HLDGS vs. Darden Restaurants |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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