Correlation Between EGF Theramed and CardioComm Solutions
Can any of the company-specific risk be diversified away by investing in both EGF Theramed and CardioComm Solutions 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 CardioComm Solutions 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 CardioComm Solutions, you can compare the effects of market volatilities on EGF Theramed and CardioComm Solutions 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 CardioComm Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGF Theramed and CardioComm Solutions.
Diversification Opportunities for EGF Theramed and CardioComm Solutions
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EGF and CardioComm is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding EGF Theramed Health and CardioComm Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CardioComm Solutions 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 CardioComm Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CardioComm Solutions has no effect on the direction of EGF Theramed i.e., EGF Theramed and CardioComm Solutions go up and down completely randomly.
Pair Corralation between EGF Theramed and CardioComm Solutions
Assuming the 90 days horizon EGF Theramed is expected to generate 1.17 times less return on investment than CardioComm Solutions. But when comparing it to its historical volatility, EGF Theramed Health is 1.45 times less risky than CardioComm Solutions. It trades about 0.08 of its potential returns per unit of risk. CardioComm Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.00 in CardioComm Solutions on August 27, 2024 and sell it today you would earn a total of 0.30 from holding CardioComm Solutions or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EGF Theramed Health vs. CardioComm Solutions
Performance |
| Timeline |
| EGF Theramed Health |
| CardioComm Solutions |
EGF Theramed and CardioComm Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGF Theramed and CardioComm Solutions
The main advantage of trading using opposite EGF Theramed and CardioComm Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGF Theramed position performs unexpectedly, CardioComm Solutions 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 CardioComm Solutions will offset losses from the drop in CardioComm Solutions' long position.| EGF Theramed vs. GE HealthCare Technologies | EGF Theramed vs. Veeva Systems Class | EGF Theramed vs. Solventum Corp | EGF Theramed vs. HealthEquity |
| CardioComm Solutions vs. Caduceus Software Systems | CardioComm Solutions vs. Cogstate Limited | CardioComm Solutions vs. Cloud DX |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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