Correlation Between Endymed and Human Xtensions
Can any of the company-specific risk be diversified away by investing in both Endymed and Human Xtensions 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 Endymed and Human Xtensions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endymed and Human Xtensions, you can compare the effects of market volatilities on Endymed and Human Xtensions 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 Endymed with a short position of Human Xtensions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endymed and Human Xtensions.
Diversification Opportunities for Endymed and Human Xtensions
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Endymed and Human is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Endymed and Human Xtensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Human Xtensions and Endymed 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 Endymed are associated (or correlated) with Human Xtensions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Human Xtensions has no effect on the direction of Endymed i.e., Endymed and Human Xtensions go up and down completely randomly.
Pair Corralation between Endymed and Human Xtensions
Assuming the 90 days trading horizon Endymed is expected to generate 1.62 times more return on investment than Human Xtensions. However, Endymed is 1.62 times more volatile than Human Xtensions. It trades about 0.26 of its potential returns per unit of risk. Human Xtensions is currently generating about -0.15 per unit of risk. If you would invest 19,800 in Endymed on August 29, 2024 and sell it today you would earn a total of 9,990 from holding Endymed or generate 50.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endymed vs. Human Xtensions
Performance |
| Timeline |
| Endymed |
| Human Xtensions |
Endymed and Human Xtensions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endymed and Human Xtensions
The main advantage of trading using opposite Endymed and Human Xtensions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endymed position performs unexpectedly, Human Xtensions 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 Human Xtensions will offset losses from the drop in Human Xtensions' long position.The idea behind Endymed and Human Xtensions 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.| Human Xtensions vs. ICL Israel Chemicals | Human Xtensions vs. MEITAV INVESTMENTS HOUSE | Human Xtensions vs. Harel Insurance Investments | Human Xtensions vs. Amot 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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