Correlation Between EPSILON HEALTHCARE and Cass Information
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and Cass Information 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 Cass Information 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 Cass Information Systems, you can compare the effects of market volatilities on EPSILON HEALTHCARE and Cass Information 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 Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Cass Information.
Diversification Opportunities for EPSILON HEALTHCARE and Cass Information
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and Cass is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems 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 Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and Cass Information go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and Cass Information
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 7.57 times more return on investment than Cass Information. However, EPSILON HEALTHCARE is 7.57 times more volatile than Cass Information Systems. It trades about 0.05 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.02 per unit of risk. If you would invest 1.20 in EPSILON HEALTHCARE LTD on August 24, 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. Cass Information Systems
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| Cass Information Systems |
EPSILON HEALTHCARE and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and Cass Information
The main advantage of trading using opposite EPSILON HEALTHCARE and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. NMI Holdings | EPSILON HEALTHCARE vs. Origin Agritech | EPSILON HEALTHCARE vs. SIVERS SEMICONDUCTORS AB |
| Cass Information vs. National Health Investors | Cass Information vs. Digilife Technologies Limited | Cass Information vs. Sabra Health Care | Cass Information vs. Sunny Optical Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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