Correlation Between EPSILON HEALTHCARE and TAG Immobilien
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and TAG Immobilien 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 TAG Immobilien 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 TAG Immobilien AG, you can compare the effects of market volatilities on EPSILON HEALTHCARE and TAG Immobilien 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 TAG Immobilien. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and TAG Immobilien.
Diversification Opportunities for EPSILON HEALTHCARE and TAG Immobilien
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and TAG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and TAG Immobilien AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAG Immobilien AG 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 TAG Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAG Immobilien AG has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and TAG Immobilien go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and TAG Immobilien
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 6.31 times more return on investment than TAG Immobilien. However, EPSILON HEALTHCARE is 6.31 times more volatile than TAG Immobilien AG. It trades about 0.05 of its potential returns per unit of risk. TAG Immobilien AG is currently generating about 0.06 per unit of risk. If you would invest 0.95 in EPSILON HEALTHCARE LTD on September 12, 2024 and sell it today you would lose (0.20) from holding EPSILON HEALTHCARE LTD or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.44% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. TAG Immobilien AG
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| TAG Immobilien AG |
EPSILON HEALTHCARE and TAG Immobilien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and TAG Immobilien
The main advantage of trading using opposite EPSILON HEALTHCARE and TAG Immobilien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, TAG Immobilien 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 TAG Immobilien will offset losses from the drop in TAG Immobilien's long position.| EPSILON HEALTHCARE vs. Merck Company | EPSILON HEALTHCARE vs. Elanco Animal Health | EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. NMI Holdings |
| TAG Immobilien vs. WisdomTree Investments | TAG Immobilien vs. Apollo Investment Corp | TAG Immobilien vs. Transport International Holdings | TAG Immobilien vs. SPORT LISBOA E |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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