Correlation Between Epsilon Healthcare and Rea
Can any of the company-specific risk be diversified away by investing in both Epsilon Healthcare and Rea 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 Rea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Healthcare and Rea Group, you can compare the effects of market volatilities on Epsilon Healthcare and Rea 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 Rea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Healthcare and Rea.
Diversification Opportunities for Epsilon Healthcare and Rea
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Epsilon and Rea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Healthcare and Rea Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rea 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 Rea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rea Group has no effect on the direction of Epsilon Healthcare i.e., Epsilon Healthcare and Rea go up and down completely randomly.
Pair Corralation between Epsilon Healthcare and Rea
If you would invest 18,341 in Rea Group on August 31, 2024 and sell it today you would earn a total of 6,812 from holding Rea Group or generate 37.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Epsilon Healthcare vs. Rea Group
Performance |
| Timeline |
| Epsilon Healthcare |
| Rea Group |
Epsilon Healthcare and Rea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epsilon Healthcare and Rea
The main advantage of trading using opposite Epsilon Healthcare and Rea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Healthcare position performs unexpectedly, Rea 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 Rea will offset losses from the drop in Rea's long position.| Epsilon Healthcare vs. Perseus Mining | Epsilon Healthcare vs. Macquarie Technology Group | Epsilon Healthcare vs. Dug Technology | Epsilon Healthcare vs. Dexus Convenience Retail |
| Rea vs. K2 Asset Management | Rea vs. Finexia Financial Group | Rea vs. Insignia Financial | Rea vs. Centaurus Metals |
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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