Correlation Between Entourage Health and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both Entourage Health and Gildan Activewear 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 Gildan Activewear 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 Gildan Activewear, you can compare the effects of market volatilities on Entourage Health and Gildan Activewear 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 Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entourage Health and Gildan Activewear.
Diversification Opportunities for Entourage Health and Gildan Activewear
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Entourage and Gildan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear 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 Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Entourage Health i.e., Entourage Health and Gildan Activewear go up and down completely randomly.
Pair Corralation between Entourage Health and Gildan Activewear
Assuming the 90 days trading horizon Entourage Health Corp is expected to generate 85.5 times more return on investment than Gildan Activewear. However, Entourage Health is 85.5 times more volatile than Gildan Activewear. It trades about 0.24 of its potential returns per unit of risk. Gildan Activewear is currently generating about 0.15 per unit of risk. If you would invest 0.50 in Entourage Health Corp on September 12, 2024 and sell it today you would earn a total of 0.50 from holding Entourage Health Corp or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Entourage Health Corp vs. Gildan Activewear
Performance |
| Timeline |
| Entourage Health Corp |
| Gildan Activewear |
Entourage Health and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entourage Health and Gildan Activewear
The main advantage of trading using opposite Entourage Health and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entourage Health position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| Entourage Health vs. Premium Income | Entourage Health vs. E L Financial Corp | Entourage Health vs. Fairfax Financial Holdings | Entourage Health vs. Fairfax Fin Hld |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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