Correlation Between EUDA Health and Aveanna Healthcare
Can any of the company-specific risk be diversified away by investing in both EUDA Health and Aveanna Healthcare 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 EUDA Health and Aveanna Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EUDA Health Holdings and Aveanna Healthcare Holdings, you can compare the effects of market volatilities on EUDA Health and Aveanna Healthcare 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 EUDA Health with a short position of Aveanna Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of EUDA Health and Aveanna Healthcare.
Diversification Opportunities for EUDA Health and Aveanna Healthcare
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between EUDA and Aveanna is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding EUDA Health Holdings and Aveanna Healthcare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveanna Healthcare and EUDA Health 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 EUDA Health Holdings are associated (or correlated) with Aveanna Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveanna Healthcare has no effect on the direction of EUDA Health i.e., EUDA Health and Aveanna Healthcare go up and down completely randomly.
Pair Corralation between EUDA Health and Aveanna Healthcare
Given the investment horizon of 90 days EUDA Health is expected to generate 1.26 times less return on investment than Aveanna Healthcare. In addition to that, EUDA Health is 1.47 times more volatile than Aveanna Healthcare Holdings. It trades about 0.05 of its total potential returns per unit of risk. Aveanna Healthcare Holdings is currently generating about 0.1 per unit of volatility. If you would invest 74.00 in Aveanna Healthcare Holdings on August 29, 2024 and sell it today you would earn a total of 483.00 from holding Aveanna Healthcare Holdings or generate 652.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EUDA Health Holdings vs. Aveanna Healthcare Holdings
Performance |
| Timeline |
| EUDA Health Holdings |
| Aveanna Healthcare |
EUDA Health and Aveanna Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EUDA Health and Aveanna Healthcare
The main advantage of trading using opposite EUDA Health and Aveanna Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EUDA Health position performs unexpectedly, Aveanna Healthcare 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 Aveanna Healthcare will offset losses from the drop in Aveanna Healthcare's long position.The idea behind EUDA Health Holdings and Aveanna Healthcare Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aveanna Healthcare vs. Acadia Healthcare | Aveanna Healthcare vs. Pennant Group | Aveanna Healthcare vs. Brookdale Senior Living | Aveanna Healthcare vs. American Shared Hospital |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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