Correlation Between Healthcare Integrated and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both Healthcare Integrated and EGF Theramed 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 Integrated and EGF Theramed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Integrated Technologies and EGF Theramed Health, you can compare the effects of market volatilities on Healthcare Integrated and EGF Theramed 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 Integrated with a short position of EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Integrated and EGF Theramed.
Diversification Opportunities for Healthcare Integrated and EGF Theramed
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Healthcare and EGF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Integrated Technolo and EGF Theramed Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGF Theramed Health and Healthcare Integrated 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 Integrated Technologies are associated (or correlated) with EGF Theramed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGF Theramed Health has no effect on the direction of Healthcare Integrated i.e., Healthcare Integrated and EGF Theramed go up and down completely randomly.
Pair Corralation between Healthcare Integrated and EGF Theramed
Given the investment horizon of 90 days Healthcare Integrated is expected to generate 12.78 times less return on investment than EGF Theramed. But when comparing it to its historical volatility, Healthcare Integrated Technologies is 5.39 times less risky than EGF Theramed. It trades about 0.04 of its potential returns per unit of risk. EGF Theramed Health is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7.80 in EGF Theramed Health on September 1, 2024 and sell it today you would earn a total of 14.20 from holding EGF Theramed Health or generate 182.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Integrated Technolo vs. EGF Theramed Health
Performance |
| Timeline |
| Healthcare Integrated |
| EGF Theramed Health |
Healthcare Integrated and EGF Theramed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Integrated and EGF Theramed
The main advantage of trading using opposite Healthcare Integrated and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Integrated position performs unexpectedly, EGF Theramed 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 EGF Theramed will offset losses from the drop in EGF Theramed's long position.| Healthcare Integrated vs. GE HealthCare Technologies | Healthcare Integrated vs. Veeva Systems Class | Healthcare Integrated vs. Solventum Corp | Healthcare Integrated vs. Doximity |
| EGF Theramed vs. GE HealthCare Technologies | EGF Theramed vs. Veeva Systems Class | EGF Theramed vs. Solventum Corp | EGF Theramed vs. Doximity |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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