Correlation Between EP Financial and Immuron
Can any of the company-specific risk be diversified away by investing in both EP Financial and Immuron 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 EP Financial and Immuron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EP Financial Group and Immuron, you can compare the effects of market volatilities on EP Financial and Immuron 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 EP Financial with a short position of Immuron. Check out your portfolio center. Please also check ongoing floating volatility patterns of EP Financial and Immuron.
Diversification Opportunities for EP Financial and Immuron
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EP1 and Immuron is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding EP Financial Group and Immuron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immuron and EP Financial 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 EP Financial Group are associated (or correlated) with Immuron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immuron has no effect on the direction of EP Financial i.e., EP Financial and Immuron go up and down completely randomly.
Pair Corralation between EP Financial and Immuron
Assuming the 90 days trading horizon EP Financial is expected to generate 3.54 times less return on investment than Immuron. But when comparing it to its historical volatility, EP Financial Group is 1.97 times less risky than Immuron. It trades about 0.01 of its potential returns per unit of risk. Immuron is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7.80 in Immuron on September 4, 2024 and sell it today you would earn a total of 0.10 from holding Immuron or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EP Financial Group vs. Immuron
Performance |
| Timeline |
| EP Financial Group |
| Immuron |
EP Financial and Immuron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EP Financial and Immuron
The main advantage of trading using opposite EP Financial and Immuron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EP Financial position performs unexpectedly, Immuron 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 Immuron will offset losses from the drop in Immuron's long position.| EP Financial vs. Westpac Banking | EP Financial vs. Ecofibre | EP Financial vs. Adriatic Metals Plc | EP Financial vs. Australian Dairy Farms |
| Immuron vs. Carnegie Clean Energy | Immuron vs. My Foodie Box | Immuron vs. Data3 | Immuron vs. Seven West Media |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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