Correlation Between EPSILON HEALTHCARE and HEINEKEN
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and HEINEKEN 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 HEINEKEN 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 HEINEKEN SP ADR, you can compare the effects of market volatilities on EPSILON HEALTHCARE and HEINEKEN 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 HEINEKEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and HEINEKEN.
Diversification Opportunities for EPSILON HEALTHCARE and HEINEKEN
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and HEINEKEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and HEINEKEN SP ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEINEKEN SP ADR 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 HEINEKEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEINEKEN SP ADR has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and HEINEKEN go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and HEINEKEN
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 1.05 times more return on investment than HEINEKEN. However, EPSILON HEALTHCARE is 1.05 times more volatile than HEINEKEN SP ADR. It trades about -0.03 of its potential returns per unit of risk. HEINEKEN SP ADR is currently generating about -0.06 per unit of risk. If you would invest 0.85 in EPSILON HEALTHCARE LTD on September 4, 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 | 99.6% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. HEINEKEN SP ADR
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| HEINEKEN SP ADR |
EPSILON HEALTHCARE and HEINEKEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and HEINEKEN
The main advantage of trading using opposite EPSILON HEALTHCARE and HEINEKEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, HEINEKEN 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 HEINEKEN will offset losses from the drop in HEINEKEN's long position.| EPSILON HEALTHCARE vs. Takeda Pharmaceutical | EPSILON HEALTHCARE vs. Elanco Animal Health | EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. Origin Agritech |
| HEINEKEN vs. EPSILON HEALTHCARE LTD | HEINEKEN vs. Sabra Health Care | HEINEKEN vs. National Health Investors | HEINEKEN vs. SHIP HEALTHCARE HLDGINC |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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