Correlation Between EWellness Healthcare and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both EWellness Healthcare and EGF Theramed 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 EWellness Healthcare and EGF Theramed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eWellness Healthcare Corp and EGF Theramed Health, you can compare the effects of market volatilities on EWellness Healthcare and EGF Theramed 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 EWellness Healthcare with a short position of EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of EWellness Healthcare and EGF Theramed.
Diversification Opportunities for EWellness Healthcare and EGF Theramed
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EWellness and EGF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding eWellness Healthcare Corp and EGF Theramed Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGF Theramed Health and EWellness 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 eWellness Healthcare Corp are associated (or correlated) with EGF Theramed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGF Theramed Health has no effect on the direction of EWellness Healthcare i.e., EWellness Healthcare and EGF Theramed go up and down completely randomly.
Pair Corralation between EWellness Healthcare and EGF Theramed
Given the investment horizon of 90 days eWellness Healthcare Corp is expected to under-perform the EGF Theramed. But the pink sheet apears to be less risky and, when comparing its historical volatility, eWellness Healthcare Corp is 11.89 times less risky than EGF Theramed. The pink sheet trades about -0.04 of its potential returns per unit of risk. The EGF Theramed Health is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 72.00 in EGF Theramed Health on November 19, 2024 and sell it today you would lose (65.90) from holding EGF Theramed Health or give up 91.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 43.32% |
| Values | Daily Returns |
eWellness Healthcare Corp vs. EGF Theramed Health
Performance |
| Timeline |
| eWellness Healthcare Corp |
| EGF Theramed Health |
EWellness Healthcare and EGF Theramed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EWellness Healthcare and EGF Theramed
The main advantage of trading using opposite EWellness Healthcare and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EWellness Healthcare position performs unexpectedly, EGF Theramed 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 EGF Theramed will offset losses from the drop in EGF Theramed's long position.| EWellness Healthcare vs. M3 Inc | EWellness Healthcare vs. Medical Cannabis Pay | EWellness Healthcare vs. Cannabis Sativa | EWellness Healthcare vs. Cloud DX |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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