Correlation Between Epsilon Healthcare and Pacific Current
Can any of the company-specific risk be diversified away by investing in both Epsilon Healthcare and Pacific Current 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 Epsilon Healthcare and Pacific Current into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Healthcare and Pacific Current Group, you can compare the effects of market volatilities on Epsilon Healthcare and Pacific Current 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 Epsilon Healthcare with a short position of Pacific Current. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Healthcare and Pacific Current.
Diversification Opportunities for Epsilon Healthcare and Pacific Current
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Epsilon and Pacific is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Healthcare and Pacific Current Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Current Group and Epsilon Healthcare 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 Epsilon Healthcare are associated (or correlated) with Pacific Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Current Group has no effect on the direction of Epsilon Healthcare i.e., Epsilon Healthcare and Pacific Current go up and down completely randomly.
Pair Corralation between Epsilon Healthcare and Pacific Current
Assuming the 90 days trading horizon Epsilon Healthcare is expected to generate 1.05 times less return on investment than Pacific Current. In addition to that, Epsilon Healthcare is 1.84 times more volatile than Pacific Current Group. It trades about 0.03 of its total potential returns per unit of risk. Pacific Current Group is currently generating about 0.05 per unit of volatility. If you would invest 694.00 in Pacific Current Group on September 12, 2024 and sell it today you would earn a total of 413.00 from holding Pacific Current Group or generate 59.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Epsilon Healthcare vs. Pacific Current Group
Performance |
| Timeline |
| Epsilon Healthcare |
| Pacific Current Group |
Epsilon Healthcare and Pacific Current Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epsilon Healthcare and Pacific Current
The main advantage of trading using opposite Epsilon Healthcare and Pacific Current positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Healthcare position performs unexpectedly, Pacific Current 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 Pacific Current will offset losses from the drop in Pacific Current's long position.| Epsilon Healthcare vs. CSL | Epsilon Healthcare vs. Tamawood | Epsilon Healthcare vs. Cochlear | Epsilon Healthcare vs. Rea Group |
| Pacific Current vs. Mirrabooka Investments | Pacific Current vs. K2 Asset Management | Pacific Current vs. EMvision Medical Devices | Pacific Current vs. Clime Investment Management |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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