Correlation Between FEMALE HEALTH and EHEALTH
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH and EHEALTH 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 FEMALE HEALTH and EHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and EHEALTH, you can compare the effects of market volatilities on FEMALE HEALTH and EHEALTH 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 FEMALE HEALTH with a short position of EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and EHEALTH.
Diversification Opportunities for FEMALE HEALTH and EHEALTH
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEMALE and EHEALTH is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH and FEMALE 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 FEMALE HEALTH are associated (or correlated) with EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of FEMALE HEALTH i.e., FEMALE HEALTH and EHEALTH go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and EHEALTH
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 1.45 times more return on investment than EHEALTH. However, FEMALE HEALTH is 1.45 times more volatile than EHEALTH. It trades about 0.0 of its potential returns per unit of risk. EHEALTH is currently generating about -0.01 per unit of risk. If you would invest 109.00 in FEMALE HEALTH on August 28, 2024 and sell it today you would lose (45.00) from holding FEMALE HEALTH or give up 41.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. EHEALTH
Performance |
| Timeline |
| FEMALE HEALTH |
| EHEALTH |
FEMALE HEALTH and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and EHEALTH
The main advantage of trading using opposite FEMALE HEALTH and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| FEMALE HEALTH vs. ACCSYS TECHPLC EO | FEMALE HEALTH vs. Iridium Communications | FEMALE HEALTH vs. Amkor Technology | FEMALE HEALTH vs. Shenandoah Telecommunications |
| EHEALTH vs. Sims Metal Management | EHEALTH vs. Jupiter Fund Management | EHEALTH vs. AGF Management Limited | EHEALTH vs. CeoTronics AG |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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