Correlation Between Emergent Health and Now Corp
Can any of the company-specific risk be diversified away by investing in both Emergent Health and Now Corp 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 Now Corp 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 Now Corp, you can compare the effects of market volatilities on Emergent Health and Now Corp 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 Now Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Health and Now Corp.
Diversification Opportunities for Emergent Health and Now Corp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emergent and Now is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Health Corp and Now Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Corp 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 Now Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Now Corp has no effect on the direction of Emergent Health i.e., Emergent Health and Now Corp go up and down completely randomly.
Pair Corralation between Emergent Health and Now Corp
Given the investment horizon of 90 days Emergent Health is expected to generate 182.97 times less return on investment than Now Corp. But when comparing it to its historical volatility, Emergent Health Corp is 20.68 times less risky than Now Corp. It trades about 0.02 of its potential returns per unit of risk. Now Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Now Corp on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Now Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Health Corp vs. Now Corp
Performance |
| Timeline |
| Emergent Health Corp |
| Now Corp |
Emergent Health and Now Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emergent Health and Now Corp
The main advantage of trading using opposite Emergent Health and Now Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Health position performs unexpectedly, Now Corp 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 Now Corp will offset losses from the drop in Now Corp's long position.| Emergent Health vs. Galexxy Holdings | Emergent Health vs. Integrated Cannabis Solutions | Emergent Health vs. Golden Developing Solutions | Emergent Health vs. Premier Biomedical |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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