Correlation Between Emergent Health and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Emergent Health and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Emergent Health and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Health and Dow Jones.
Diversification Opportunities for Emergent Health and Dow Jones
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emergent and Dow is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Health Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Emergent Health i.e., Emergent Health and Dow Jones go up and down completely randomly.
Pair Corralation between Emergent Health and Dow Jones
Given the investment horizon of 90 days Emergent Health Corp is expected to generate 13.55 times more return on investment than Dow Jones. However, Emergent Health is 13.55 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of risk. If you would invest 0.14 in Emergent Health Corp on August 29, 2024 and sell it today you would lose (0.04) from holding Emergent Health Corp or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Health Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Emergent Health and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Emergent Health Corp
Pair trading matchups for Emergent Health
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Emergent Health and Dow Jones
The main advantage of trading using opposite Emergent Health and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Health position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Emergent Health vs. Galexxy Holdings | Emergent Health vs. Integrated Cannabis Solutions | Emergent Health vs. Golden Developing Solutions | Emergent Health vs. Premier Biomedical |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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