Correlation Between Energean Oil and Universal Health
Can any of the company-specific risk be diversified away by investing in both Energean Oil and Universal Health 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 Energean Oil and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energean Oil Gas and Universal Health Services, you can compare the effects of market volatilities on Energean Oil and Universal Health 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 Energean Oil with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energean Oil and Universal Health.
Diversification Opportunities for Energean Oil and Universal Health
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energean and Universal is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Energean Oil Gas and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services and Energean Oil 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 Energean Oil Gas are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of Energean Oil i.e., Energean Oil and Universal Health go up and down completely randomly.
Pair Corralation between Energean Oil and Universal Health
Assuming the 90 days trading horizon Energean Oil Gas is expected to under-perform the Universal Health. But the stock apears to be less risky and, when comparing its historical volatility, Energean Oil Gas is 1.04 times less risky than Universal Health. The stock trades about -0.36 of its potential returns per unit of risk. The Universal Health Services is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 17,936 in Universal Health Services on November 2, 2024 and sell it today you would earn a total of 1,220 from holding Universal Health Services or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Energean Oil Gas vs. Universal Health Services
Performance |
| Timeline |
| Energean Oil Gas |
| Universal Health Services |
Energean Oil and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energean Oil and Universal Health
The main advantage of trading using opposite Energean Oil and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energean Oil position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| Energean Oil vs. Zoom Video Communications | Energean Oil vs. Public Storage | Energean Oil vs. Gaztransport et Technigaz | Energean Oil vs. Ion Beam Applications |
| Universal Health vs. Sabre Insurance Group | Universal Health vs. Endeavour Mining Corp | Universal Health vs. Hollywood Bowl Group | Universal Health vs. UNIQA Insurance Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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