Correlation Between EGF Theramed and Cogstate
Can any of the company-specific risk be diversified away by investing in both EGF Theramed and Cogstate 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 EGF Theramed and Cogstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EGF Theramed Health and Cogstate Limited, you can compare the effects of market volatilities on EGF Theramed and Cogstate 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 EGF Theramed with a short position of Cogstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGF Theramed and Cogstate.
Diversification Opportunities for EGF Theramed and Cogstate
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between EGF and Cogstate is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding EGF Theramed Health and Cogstate Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogstate Limited and EGF Theramed 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 EGF Theramed Health are associated (or correlated) with Cogstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogstate Limited has no effect on the direction of EGF Theramed i.e., EGF Theramed and Cogstate go up and down completely randomly.
Pair Corralation between EGF Theramed and Cogstate
Assuming the 90 days horizon EGF Theramed Health is expected to generate 16.48 times more return on investment than Cogstate. However, EGF Theramed is 16.48 times more volatile than Cogstate Limited. It trades about 0.27 of its potential returns per unit of risk. Cogstate Limited is currently generating about 0.05 per unit of risk. If you would invest 5.70 in EGF Theramed Health on August 26, 2024 and sell it today you would earn a total of 15.30 from holding EGF Theramed Health or generate 268.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EGF Theramed Health vs. Cogstate Limited
Performance |
| Timeline |
| EGF Theramed Health |
| Cogstate Limited |
EGF Theramed and Cogstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGF Theramed and Cogstate
The main advantage of trading using opposite EGF Theramed and Cogstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGF Theramed position performs unexpectedly, Cogstate 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 Cogstate will offset losses from the drop in Cogstate's long position.| EGF Theramed vs. GE HealthCare Technologies | EGF Theramed vs. Veeva Systems Class | EGF Theramed vs. Solventum Corp | EGF Theramed vs. HealthEquity |
| Cogstate vs. GE HealthCare Technologies | Cogstate vs. Veeva Systems Class | Cogstate vs. Solventum Corp | Cogstate vs. HealthEquity |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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