Correlation Between Entourage Health and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Entourage 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 Entourage 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 Entourage Health Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Entourage 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 Entourage Health with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entourage Health and Dow Jones.
Diversification Opportunities for Entourage Health and Dow Jones
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Entourage and Dow is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Entourage 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 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 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 Entourage Health i.e., Entourage Health and Dow Jones go up and down completely randomly.
Pair Corralation between Entourage Health and Dow Jones
Assuming the 90 days trading horizon Entourage Health Corp is expected to generate 55.92 times more return on investment than Dow Jones. However, Entourage Health is 55.92 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.33 per unit of risk. If you would invest 0.50 in Entourage Health Corp on November 3, 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 | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Entourage Health Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Entourage Health and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Entourage Health Corp
Pair trading matchups for Entourage Health
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Entourage Health and Dow Jones
The main advantage of trading using opposite Entourage Health and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entourage 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.| Entourage Health vs. Auxly Cannabis Group | Entourage Health vs. Lifeist Wellness | Entourage Health vs. Medipharm Labs Corp |
| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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