Correlation Between Entourage Health and Premium Income
Can any of the company-specific risk be diversified away by investing in both Entourage Health and Premium Income 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 Premium Income 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 Premium Income, you can compare the effects of market volatilities on Entourage Health and Premium Income 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 Premium Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entourage Health and Premium Income.
Diversification Opportunities for Entourage Health and Premium Income
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Entourage and Premium is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Income 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 Premium Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Income has no effect on the direction of Entourage Health i.e., Entourage Health and Premium Income go up and down completely randomly.
Pair Corralation between Entourage Health and Premium Income
Assuming the 90 days trading horizon Entourage Health Corp is expected to generate 15.64 times more return on investment than Premium Income. However, Entourage Health is 15.64 times more volatile than Premium Income. It trades about 0.12 of its potential returns per unit of risk. Premium Income is currently generating about -0.01 per unit of risk. If you would invest 2.00 in Entourage Health Corp on September 12, 2024 and sell it today you would lose (1.00) from holding Entourage Health Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entourage Health Corp vs. Premium Income
Performance |
| Timeline |
| Entourage Health Corp |
| Premium Income |
Entourage Health and Premium Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entourage Health and Premium Income
The main advantage of trading using opposite Entourage Health and Premium Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entourage Health position performs unexpectedly, Premium Income 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 Premium Income will offset losses from the drop in Premium Income'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 |
| Premium Income vs. Sprott Physical Gold | Premium Income vs. Brompton Split Banc | Premium Income vs. TDb Split Corp | Premium Income vs. Prime Dividend Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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