Correlation Between Ensign and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both Ensign and VARIOUS EATERIES 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 Ensign and VARIOUS EATERIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Ensign Group and VARIOUS EATERIES LS, you can compare the effects of market volatilities on Ensign and VARIOUS EATERIES 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 Ensign with a short position of VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and VARIOUS EATERIES.
Diversification Opportunities for Ensign and VARIOUS EATERIES
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ensign and VARIOUS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES and Ensign 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 The Ensign Group are associated (or correlated) with VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Ensign i.e., Ensign and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between Ensign and VARIOUS EATERIES
Assuming the 90 days horizon The Ensign Group is expected to generate 0.87 times more return on investment than VARIOUS EATERIES. However, The Ensign Group is 1.15 times less risky than VARIOUS EATERIES. It trades about -0.14 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.35 per unit of risk. If you would invest 13,394 in The Ensign Group on October 14, 2024 and sell it today you would lose (494.00) from holding The Ensign Group or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Ensign Group vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| Ensign Group |
| VARIOUS EATERIES |
Ensign and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and VARIOUS EATERIES
The main advantage of trading using opposite Ensign and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| Ensign vs. VARIOUS EATERIES LS | Ensign vs. TELECOM ITALIA | Ensign vs. Molson Coors Beverage | Ensign vs. Singapore Telecommunications Limited |
| VARIOUS EATERIES vs. SIEM OFFSHORE NEW | VARIOUS EATERIES vs. Eidesvik Offshore ASA | VARIOUS EATERIES vs. Clean Energy Fuels | VARIOUS EATERIES vs. Taiwan Semiconductor Manufacturing |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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