Correlation Between EJF Investments and Worldwide Healthcare
Can any of the company-specific risk be diversified away by investing in both EJF Investments and Worldwide 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 EJF Investments and Worldwide Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and Worldwide Healthcare Trust, you can compare the effects of market volatilities on EJF Investments and Worldwide 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 EJF Investments with a short position of Worldwide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and Worldwide Healthcare.
Diversification Opportunities for EJF Investments and Worldwide Healthcare
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EJF and Worldwide is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and Worldwide Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldwide Healthcare 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 Worldwide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldwide Healthcare has no effect on the direction of EJF Investments i.e., EJF Investments and Worldwide Healthcare go up and down completely randomly.
Pair Corralation between EJF Investments and Worldwide Healthcare
Assuming the 90 days trading horizon EJF Investments is expected to generate 1.17 times more return on investment than Worldwide Healthcare. However, EJF Investments is 1.17 times more volatile than Worldwide Healthcare Trust. It trades about 0.19 of its potential returns per unit of risk. Worldwide Healthcare Trust is currently generating about -0.17 per unit of risk. If you would invest 11,750 in EJF Investments on October 11, 2024 and sell it today you would earn a total of 550.00 from holding EJF Investments or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
EJF Investments vs. Worldwide Healthcare Trust
Performance |
| Timeline |
| EJF Investments |
| Worldwide Healthcare |
EJF Investments and Worldwide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and Worldwide Healthcare
The main advantage of trading using opposite EJF Investments and Worldwide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments position performs unexpectedly, Worldwide 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 Worldwide Healthcare will offset losses from the drop in Worldwide Healthcare's long position.| EJF Investments vs. Fevertree Drinks Plc | EJF Investments vs. Ecclesiastical Insurance Office | EJF Investments vs. GreenX Metals | EJF Investments vs. Associated British Foods |
| Worldwide Healthcare vs. Ironveld Plc | Worldwide Healthcare vs. Hochschild Mining plc | Worldwide Healthcare vs. Panther Metals PLC | Worldwide Healthcare vs. United States Steel |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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