Correlation Between Ecofibre and Global Health
Can any of the company-specific risk be diversified away by investing in both Ecofibre and Global 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 Ecofibre and Global Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofibre and Global Health, you can compare the effects of market volatilities on Ecofibre and Global 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 Ecofibre with a short position of Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofibre and Global Health.
Diversification Opportunities for Ecofibre and Global Health
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ecofibre and Global is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ecofibre and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health and Ecofibre 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 Ecofibre are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Ecofibre i.e., Ecofibre and Global Health go up and down completely randomly.
Pair Corralation between Ecofibre and Global Health
Assuming the 90 days trading horizon Ecofibre is expected to under-perform the Global Health. In addition to that, Ecofibre is 3.13 times more volatile than Global Health. It trades about -0.17 of its total potential returns per unit of risk. Global Health is currently generating about 0.01 per unit of volatility. If you would invest 14.00 in Global Health on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Global Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ecofibre vs. Global Health
Performance |
| Timeline |
| Ecofibre |
| Global Health |
Ecofibre and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofibre and Global Health
The main advantage of trading using opposite Ecofibre and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofibre position performs unexpectedly, Global 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 Global Health will offset losses from the drop in Global Health's long position.| Ecofibre vs. Energy Resources | Ecofibre vs. 88 Energy | Ecofibre vs. Amani Gold | Ecofibre vs. A1 Investments Resources |
| Global Health vs. M3 Mining | Global Health vs. Beston Global Food | Global Health vs. Globe Metals Mining | Global Health vs. Peel Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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