Correlation Between Global Healthcare and Edgepoint Global

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Can any of the company-specific risk be diversified away by investing in both Global Healthcare and Edgepoint Global 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 Healthcare and Edgepoint Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Healthcare Income and Edgepoint Global Portfolio, you can compare the effects of market volatilities on Global Healthcare and Edgepoint Global 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 Healthcare with a short position of Edgepoint Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Healthcare and Edgepoint Global.

Diversification Opportunities for Global Healthcare and Edgepoint Global

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Global and Edgepoint is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Global Healthcare Income and Edgepoint Global Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Global Por and Global 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 Global Healthcare Income are associated (or correlated) with Edgepoint Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Global Por has no effect on the direction of Global Healthcare i.e., Global Healthcare and Edgepoint Global go up and down completely randomly.

Pair Corralation between Global Healthcare and Edgepoint Global

Assuming the 90 days trading horizon Global Healthcare Income is expected to under-perform the Edgepoint Global. In addition to that, Global Healthcare is 1.29 times more volatile than Edgepoint Global Portfolio. It trades about -0.19 of its total potential returns per unit of risk. Edgepoint Global Portfolio is currently generating about 0.17 per unit of volatility. If you would invest  3,853  in Edgepoint Global Portfolio on September 12, 2024 and sell it today you would earn a total of  88.00  from holding Edgepoint Global Portfolio or generate 2.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Global Healthcare Income  vs.  Edgepoint Global Portfolio

 Performance 
       Timeline  
Global Healthcare Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global Healthcare Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.
Edgepoint Global Por 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Global Portfolio are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively weak forward-looking indicators, Edgepoint Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Healthcare and Edgepoint Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global Healthcare and Edgepoint Global

The main advantage of trading using opposite Global Healthcare and Edgepoint Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Healthcare position performs unexpectedly, Edgepoint Global 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 Edgepoint Global will offset losses from the drop in Edgepoint Global's long position.
The idea behind Global Healthcare Income and Edgepoint Global Portfolio 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.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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