Correlation Between Emergent Health and Benchmark Botanics
Can any of the company-specific risk be diversified away by investing in both Emergent Health and Benchmark Botanics 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 Emergent Health and Benchmark Botanics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emergent Health Corp and Benchmark Botanics, you can compare the effects of market volatilities on Emergent Health and Benchmark Botanics 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 Emergent Health with a short position of Benchmark Botanics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Health and Benchmark Botanics.
Diversification Opportunities for Emergent Health and Benchmark Botanics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emergent and Benchmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Health Corp and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and Emergent Health 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 Emergent Health Corp are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of Emergent Health i.e., Emergent Health and Benchmark Botanics go up and down completely randomly.
Pair Corralation between Emergent Health and Benchmark Botanics
If you would invest 0.34 in Benchmark Botanics on September 18, 2024 and sell it today you would earn a total of 0.00 from holding Benchmark Botanics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Health Corp vs. Benchmark Botanics
Performance |
| Timeline |
| Emergent Health Corp |
| Benchmark Botanics |
Emergent Health and Benchmark Botanics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emergent Health and Benchmark Botanics
The main advantage of trading using opposite Emergent Health and Benchmark Botanics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Health position performs unexpectedly, Benchmark Botanics 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 Benchmark Botanics will offset losses from the drop in Benchmark Botanics' long position.The idea behind Emergent Health Corp and Benchmark Botanics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets |