Correlation Between Global E and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both Global E and Viemed Healthcare 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 Global E and Viemed Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and Viemed Healthcare, you can compare the effects of market volatilities on Global E and Viemed Healthcare 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 Global E with a short position of Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Viemed Healthcare.
Diversification Opportunities for Global E and Viemed Healthcare
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Viemed is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare and Global E 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 Global E Online are associated (or correlated) with Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Global E i.e., Global E and Viemed Healthcare go up and down completely randomly.
Pair Corralation between Global E and Viemed Healthcare
Given the investment horizon of 90 days Global E Online is expected to generate 1.52 times more return on investment than Viemed Healthcare. However, Global E is 1.52 times more volatile than Viemed Healthcare. It trades about 0.47 of its potential returns per unit of risk. Viemed Healthcare is currently generating about 0.04 per unit of risk. If you would invest 3,844 in Global E Online on September 1, 2024 and sell it today you would earn a total of 1,384 from holding Global E Online or generate 36.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Online vs. Viemed Healthcare
Performance |
| Timeline |
| Global E Online |
| Viemed Healthcare |
Global E and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and Viemed Healthcare
The main advantage of trading using opposite Global E and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E position performs unexpectedly, Viemed Healthcare 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 Viemed Healthcare will offset losses from the drop in Viemed Healthcare's long position.The idea behind Global E Online and Viemed Healthcare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. Nevro Corp | Viemed Healthcare vs. Paragon 28 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |