Correlation Between Grace Therapeutics, and Emmaus Life

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Grace Therapeutics, and Emmaus Life 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 Grace Therapeutics, and Emmaus Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grace Therapeutics, and Emmaus Life Sciences, you can compare the effects of market volatilities on Grace Therapeutics, and Emmaus Life 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 Grace Therapeutics, with a short position of Emmaus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grace Therapeutics, and Emmaus Life.

Diversification Opportunities for Grace Therapeutics, and Emmaus Life

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Grace and Emmaus is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Grace Therapeutics, and Emmaus Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmaus Life Sciences and Grace Therapeutics, 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 Grace Therapeutics, are associated (or correlated) with Emmaus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmaus Life Sciences has no effect on the direction of Grace Therapeutics, i.e., Grace Therapeutics, and Emmaus Life go up and down completely randomly.

Pair Corralation between Grace Therapeutics, and Emmaus Life

If you would invest  321.00  in Grace Therapeutics, on August 27, 2024 and sell it today you would earn a total of  23.00  from holding Grace Therapeutics, or generate 7.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy4.76%
ValuesDaily Returns

Grace Therapeutics,  vs.  Emmaus Life Sciences

 Performance 
       Timeline  
Grace Therapeutics, 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Grace Therapeutics, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Grace Therapeutics, exhibited solid returns over the last few months and may actually be approaching a breakup point.
Emmaus Life Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Emmaus Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Emmaus Life is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Grace Therapeutics, and Emmaus Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grace Therapeutics, and Emmaus Life

The main advantage of trading using opposite Grace Therapeutics, and Emmaus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grace Therapeutics, position performs unexpectedly, Emmaus Life 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 Emmaus Life will offset losses from the drop in Emmaus Life's long position.
The idea behind Grace Therapeutics, and Emmaus Life Sciences 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.
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio