Correlation Between EJF Investments and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both EJF Investments and Naturhouse Health 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 EJF Investments and Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and Naturhouse Health SA, you can compare the effects of market volatilities on EJF Investments and Naturhouse Health 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 EJF Investments with a short position of Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and Naturhouse Health.
Diversification Opportunities for EJF Investments and Naturhouse Health
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EJF and Naturhouse is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health and EJF Investments 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 EJF Investments are associated (or correlated) with Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of EJF Investments i.e., EJF Investments and Naturhouse Health go up and down completely randomly.
Pair Corralation between EJF Investments and Naturhouse Health
Assuming the 90 days trading horizon EJF Investments is expected to generate 0.69 times more return on investment than Naturhouse Health. However, EJF Investments is 1.44 times less risky than Naturhouse Health. It trades about 0.32 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.17 per unit of risk. If you would invest 12,000 in EJF Investments on October 22, 2024 and sell it today you would earn a total of 650.00 from holding EJF Investments or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EJF Investments vs. Naturhouse Health SA
Performance |
| Timeline |
| EJF Investments |
| Naturhouse Health |
EJF Investments and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and Naturhouse Health
The main advantage of trading using opposite EJF Investments and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| EJF Investments vs. Catalyst Media Group | EJF Investments vs. Sabre Insurance Group | EJF Investments vs. Hollywood Bowl Group | EJF Investments vs. Intermediate Capital Group |
| Naturhouse Health vs. Gear4music Plc | Naturhouse Health vs. Games Workshop Group | Naturhouse Health vs. Ecofin Global Utilities | Naturhouse Health vs. EJF Investments |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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