Correlation Between Global Health and EP Financial
Can any of the company-specific risk be diversified away by investing in both Global Health and EP Financial 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 Health and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and EP Financial Group, you can compare the effects of market volatilities on Global Health and EP Financial 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 Health with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and EP Financial.
Diversification Opportunities for Global Health and EP Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and EP1 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and Global 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 Global Health are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Global Health i.e., Global Health and EP Financial go up and down completely randomly.
Pair Corralation between Global Health and EP Financial
Assuming the 90 days trading horizon Global Health is expected to generate 7.62 times less return on investment than EP Financial. In addition to that, Global Health is 1.79 times more volatile than EP Financial Group. It trades about 0.02 of its total potential returns per unit of risk. EP Financial Group is currently generating about 0.21 per unit of volatility. If you would invest 48.00 in EP Financial Group on September 13, 2024 and sell it today you would earn a total of 4.00 from holding EP Financial Group or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. EP Financial Group
Performance |
| Timeline |
| Global Health |
| EP Financial Group |
Global Health and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and EP Financial
The main advantage of trading using opposite Global Health and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| Global Health vs. PVW Resources | Global Health vs. Woolworths | Global Health vs. Wesfarmers | Global Health vs. Ramsay Health Care |
| EP Financial vs. Bio Gene Technology | EP Financial vs. Cleanaway Waste Management | EP Financial vs. Platinum Asset Management | EP Financial vs. K2 Asset Management |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |