Correlation Between Expand Energy and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Sotera Health 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 Expand Energy and Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Sotera Health Co, you can compare the effects of market volatilities on Expand Energy and Sotera Health 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 Expand Energy with a short position of Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Sotera Health.
Diversification Opportunities for Expand Energy and Sotera Health
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Expand and Sotera is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Expand Energy 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 Expand Energy are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Expand Energy i.e., Expand Energy and Sotera Health go up and down completely randomly.
Pair Corralation between Expand Energy and Sotera Health
Assuming the 90 days horizon Expand Energy is expected to generate 1.25 times more return on investment than Sotera Health. However, Expand Energy is 1.25 times more volatile than Sotera Health Co. It trades about 0.36 of its potential returns per unit of risk. Sotera Health Co is currently generating about 0.0 per unit of risk. If you would invest 8,963 in Expand Energy on October 23, 2024 and sell it today you would earn a total of 1,169 from holding Expand Energy or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Sotera Health Co
Performance |
| Timeline |
| Expand Energy |
| Sotera Health |
Expand Energy and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Sotera Health
The main advantage of trading using opposite Expand Energy and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Expand Energy vs. Amkor Technology | Expand Energy vs. National Beverage Corp | Expand Energy vs. Fomento Economico Mexicano | Expand Energy vs. Radcom |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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