Correlation Between Gold Road and Epsilon Healthcare
Can any of the company-specific risk be diversified away by investing in both Gold Road and Epsilon 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 Gold Road and Epsilon Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and Epsilon Healthcare, you can compare the effects of market volatilities on Gold Road and Epsilon 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 Gold Road with a short position of Epsilon Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Epsilon Healthcare.
Diversification Opportunities for Gold Road and Epsilon Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gold and Epsilon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Epsilon Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon Healthcare and Gold Road 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 Gold Road Resources are associated (or correlated) with Epsilon Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epsilon Healthcare has no effect on the direction of Gold Road i.e., Gold Road and Epsilon Healthcare go up and down completely randomly.
Pair Corralation between Gold Road and Epsilon Healthcare
Assuming the 90 days trading horizon Gold Road Resources is expected to generate 3.27 times more return on investment than Epsilon Healthcare. However, Gold Road is 3.27 times more volatile than Epsilon Healthcare. It trades about 0.01 of its potential returns per unit of risk. Epsilon Healthcare is currently generating about -0.02 per unit of risk. If you would invest 196.00 in Gold Road Resources on August 29, 2024 and sell it today you would lose (10.00) from holding Gold Road Resources or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. Epsilon Healthcare
Performance |
| Timeline |
| Gold Road Resources |
| Epsilon Healthcare |
Gold Road and Epsilon Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Epsilon Healthcare
The main advantage of trading using opposite Gold Road and Epsilon Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Epsilon 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 Epsilon Healthcare will offset losses from the drop in Epsilon Healthcare's long position.| Gold Road vs. Northern Star Resources | Gold Road vs. Evolution Mining | Gold Road vs. Bluescope Steel | Gold Road vs. Sandfire Resources NL |
| Epsilon Healthcare vs. Westpac Banking | Epsilon Healthcare vs. Champion Iron | Epsilon Healthcare vs. Ridley | Epsilon Healthcare vs. Peel Mining |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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