Correlation Between Ep Emerging and HE Equipment
Can any of the company-specific risk be diversified away by investing in both Ep Emerging and HE Equipment 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 Emerging and HE Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and HE Equipment Services, you can compare the effects of market volatilities on Ep Emerging and HE Equipment 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 Emerging with a short position of HE Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and HE Equipment.
Diversification Opportunities for Ep Emerging and HE Equipment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EPASX and HEES is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and HE Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HE Equipment Services and Ep Emerging 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 Emerging Markets are associated (or correlated) with HE Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HE Equipment Services has no effect on the direction of Ep Emerging i.e., Ep Emerging and HE Equipment go up and down completely randomly.
Pair Corralation between Ep Emerging and HE Equipment
Assuming the 90 days horizon Ep Emerging Markets is expected to under-perform the HE Equipment. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ep Emerging Markets is 9.01 times less risky than HE Equipment. The mutual fund trades about -0.01 of its potential returns per unit of risk. The HE Equipment Services is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,558 in HE Equipment Services on January 14, 2025 and sell it today you would earn a total of 4,535 from holding HE Equipment Services or generate 99.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Ep Emerging Markets vs. HE Equipment Services
Performance |
| Timeline |
| Ep Emerging Markets |
| HE Equipment Services |
Ep Emerging and HE Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and HE Equipment
The main advantage of trading using opposite Ep Emerging and HE Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, HE Equipment 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 HE Equipment will offset losses from the drop in HE Equipment's long position.| Ep Emerging vs. Absolute Convertible Arbitrage | Ep Emerging vs. Gabelli Convertible And | Ep Emerging vs. Calamos Dynamic Convertible | Ep Emerging vs. Rationalpier 88 Convertible |
| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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