Correlation Between Healthcare and ESH Acquisition
Can any of the company-specific risk be diversified away by investing in both Healthcare and ESH Acquisition 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 Healthcare and ESH Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare AI Acquisition and ESH Acquisition Corp, you can compare the effects of market volatilities on Healthcare and ESH Acquisition 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 Healthcare with a short position of ESH Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and ESH Acquisition.
Diversification Opportunities for Healthcare and ESH Acquisition
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Healthcare and ESH is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare AI Acquisition and ESH Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESH Acquisition Corp and Healthcare 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 Healthcare AI Acquisition are associated (or correlated) with ESH Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESH Acquisition Corp has no effect on the direction of Healthcare i.e., Healthcare and ESH Acquisition go up and down completely randomly.
Pair Corralation between Healthcare and ESH Acquisition
Given the investment horizon of 90 days Healthcare is expected to generate 73.56 times less return on investment than ESH Acquisition. But when comparing it to its historical volatility, Healthcare AI Acquisition is 17.34 times less risky than ESH Acquisition. It trades about 0.06 of its potential returns per unit of risk. ESH Acquisition Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 9.00 in ESH Acquisition Corp on October 20, 2024 and sell it today you would earn a total of 2.00 from holding ESH Acquisition Corp or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.33% |
| Values | Daily Returns |
Healthcare AI Acquisition vs. ESH Acquisition Corp
Performance |
| Timeline |
| Healthcare AI Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ESH Acquisition Corp |
Healthcare and ESH Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare and ESH Acquisition
The main advantage of trading using opposite Healthcare and ESH Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare position performs unexpectedly, ESH Acquisition 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 ESH Acquisition will offset losses from the drop in ESH Acquisition's long position.The idea behind Healthcare AI Acquisition and ESH Acquisition Corp 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.| ESH Acquisition vs. Ziff Davis | ESH Acquisition vs. Radcom | ESH Acquisition vs. Gamehost | ESH Acquisition vs. Playtika Holding Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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