Correlation Between Cogstate and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both Cogstate and EGF Theramed 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 Cogstate and EGF Theramed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogstate Limited and EGF Theramed Health, you can compare the effects of market volatilities on Cogstate and EGF Theramed 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 Cogstate with a short position of EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogstate and EGF Theramed.
Diversification Opportunities for Cogstate and EGF Theramed
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cogstate and EGF is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cogstate Limited and EGF Theramed Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGF Theramed Health and Cogstate 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 Cogstate Limited are associated (or correlated) with EGF Theramed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGF Theramed Health has no effect on the direction of Cogstate i.e., Cogstate and EGF Theramed go up and down completely randomly.
Pair Corralation between Cogstate and EGF Theramed
Assuming the 90 days horizon Cogstate is expected to generate 45.51 times less return on investment than EGF Theramed. But when comparing it to its historical volatility, Cogstate Limited is 27.47 times less risky than EGF Theramed. It trades about 0.14 of its potential returns per unit of risk. EGF Theramed Health is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6.80 in EGF Theramed Health on October 23, 2024 and sell it today you would earn a total of 12.20 from holding EGF Theramed Health or generate 179.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogstate Limited vs. EGF Theramed Health
Performance |
| Timeline |
| Cogstate Limited |
| EGF Theramed Health |
Cogstate and EGF Theramed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogstate and EGF Theramed
The main advantage of trading using opposite Cogstate and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogstate position performs unexpectedly, EGF Theramed 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 EGF Theramed will offset losses from the drop in EGF Theramed's long position.| Cogstate vs. Caduceus Software Systems | Cogstate vs. Cloud DX | Cogstate vs. Cognetivity Neurosciences | Cogstate vs. Healthcare Integrated Technologies |
| EGF Theramed vs. Mitesco | EGF Theramed vs. Reliq Health Technologies | EGF Theramed vs. Healthcare Triangle | EGF Theramed vs. Bullfrog AI Holdings, |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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