Correlation Between Epitomee Medical and Sofwave Medical
Can any of the company-specific risk be diversified away by investing in both Epitomee Medical and Sofwave Medical 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 Epitomee Medical and Sofwave Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epitomee Medical and Sofwave Medical, you can compare the effects of market volatilities on Epitomee Medical and Sofwave Medical 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 Epitomee Medical with a short position of Sofwave Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epitomee Medical and Sofwave Medical.
Diversification Opportunities for Epitomee Medical and Sofwave Medical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Epitomee and Sofwave is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Epitomee Medical and Sofwave Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofwave Medical and Epitomee Medical 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 Epitomee Medical are associated (or correlated) with Sofwave Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofwave Medical has no effect on the direction of Epitomee Medical i.e., Epitomee Medical and Sofwave Medical go up and down completely randomly.
Pair Corralation between Epitomee Medical and Sofwave Medical
Assuming the 90 days trading horizon Epitomee Medical is expected to generate 4.46 times more return on investment than Sofwave Medical. However, Epitomee Medical is 4.46 times more volatile than Sofwave Medical. It trades about 0.04 of its potential returns per unit of risk. Sofwave Medical is currently generating about 0.04 per unit of risk. If you would invest 107,600 in Epitomee Medical on November 2, 2024 and sell it today you would lose (14,790) from holding Epitomee Medical or give up 13.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Epitomee Medical vs. Sofwave Medical
Performance |
| Timeline |
| Epitomee Medical |
| Sofwave Medical |
Epitomee Medical and Sofwave Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epitomee Medical and Sofwave Medical
The main advantage of trading using opposite Epitomee Medical and Sofwave Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epitomee Medical position performs unexpectedly, Sofwave Medical 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 Sofwave Medical will offset losses from the drop in Sofwave Medical's long position.| Epitomee Medical vs. IDI Insurance | Epitomee Medical vs. Scope Metals Group | Epitomee Medical vs. Electreon Wireless | Epitomee Medical vs. B Communications |
| Sofwave Medical vs. Unic tech Limited Partnership | Sofwave Medical vs. Millennium Food Tech LP | Sofwave Medical vs. Insuline Medical | Sofwave Medical vs. Spuntech |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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