Correlation Between Entourage Health and Brookfield
Can any of the company-specific risk be diversified away by investing in both Entourage Health and Brookfield 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 Entourage Health and Brookfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entourage Health Corp and Brookfield, you can compare the effects of market volatilities on Entourage Health and Brookfield 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 Entourage Health with a short position of Brookfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entourage Health and Brookfield.
Diversification Opportunities for Entourage Health and Brookfield
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Entourage and Brookfield is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield and Entourage 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 Entourage Health Corp are associated (or correlated) with Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Entourage Health i.e., Entourage Health and Brookfield go up and down completely randomly.
Pair Corralation between Entourage Health and Brookfield
Assuming the 90 days trading horizon Entourage Health Corp is expected to generate 97.46 times more return on investment than Brookfield. However, Entourage Health is 97.46 times more volatile than Brookfield. It trades about 0.21 of its potential returns per unit of risk. Brookfield is currently generating about 0.38 per unit of risk. If you would invest 1.00 in Entourage Health Corp on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Entourage Health Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entourage Health Corp vs. Brookfield
Performance |
| Timeline |
| Entourage Health Corp |
| Brookfield |
Entourage Health and Brookfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entourage Health and Brookfield
The main advantage of trading using opposite Entourage Health and Brookfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entourage Health position performs unexpectedly, Brookfield 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 Brookfield will offset losses from the drop in Brookfield's long position.| Entourage Health vs. Solar Alliance Energy | Entourage Health vs. Braille Energy Systems | Entourage Health vs. MedMira | Entourage Health vs. Lite Access Technologies |
| Brookfield vs. Falcon Energy Materials | Brookfield vs. Quorum Information Technologies | Brookfield vs. VIP Entertainment Technologies | Brookfield vs. Thunderbird Entertainment 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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