Correlation Between Benchmark Botanics and Epsilon Healthcare
Can any of the company-specific risk be diversified away by investing in both Benchmark Botanics and Epsilon Healthcare 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 Benchmark Botanics and Epsilon Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Botanics and Epsilon Healthcare Limited, you can compare the effects of market volatilities on Benchmark Botanics and Epsilon Healthcare 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 Benchmark Botanics with a short position of Epsilon Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Botanics and Epsilon Healthcare.
Diversification Opportunities for Benchmark Botanics and Epsilon Healthcare
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Benchmark and Epsilon is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Botanics and Epsilon Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon Healthcare and Benchmark Botanics 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 Benchmark Botanics are associated (or correlated) with Epsilon Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epsilon Healthcare has no effect on the direction of Benchmark Botanics i.e., Benchmark Botanics and Epsilon Healthcare go up and down completely randomly.
Pair Corralation between Benchmark Botanics and Epsilon Healthcare
If you would invest 0.14 in Epsilon Healthcare Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Epsilon Healthcare Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Benchmark Botanics vs. Epsilon Healthcare Limited
Performance |
| Timeline |
| Benchmark Botanics |
| Epsilon Healthcare |
Benchmark Botanics and Epsilon Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Botanics and Epsilon Healthcare
The main advantage of trading using opposite Benchmark Botanics and Epsilon Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Botanics position performs unexpectedly, Epsilon Healthcare 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 Epsilon Healthcare will offset losses from the drop in Epsilon Healthcare's long position.| Benchmark Botanics vs. Speakeasy Cannabis Club | Benchmark Botanics vs. City View Green | Benchmark Botanics vs. BC Craft Supply | Benchmark Botanics vs. Ravenquest Biomed |
| Epsilon Healthcare vs. Holloman Energy Corp | Epsilon Healthcare vs. cbdMD Inc | Epsilon Healthcare vs. Evolus Inc | Epsilon Healthcare vs. CV Sciences |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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