Correlation Between Labiana Health and Grupo Ezentis
Can any of the company-specific risk be diversified away by investing in both Labiana Health and Grupo Ezentis 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 Labiana Health and Grupo Ezentis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labiana Health SA and Grupo Ezentis SA, you can compare the effects of market volatilities on Labiana Health and Grupo Ezentis 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 Labiana Health with a short position of Grupo Ezentis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labiana Health and Grupo Ezentis.
Diversification Opportunities for Labiana Health and Grupo Ezentis
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Labiana and Grupo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Labiana Health SA and Grupo Ezentis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Ezentis SA and Labiana Health 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 Labiana Health SA are associated (or correlated) with Grupo Ezentis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Ezentis SA has no effect on the direction of Labiana Health i.e., Labiana Health and Grupo Ezentis go up and down completely randomly.
Pair Corralation between Labiana Health and Grupo Ezentis
Assuming the 90 days trading horizon Labiana Health SA is expected to under-perform the Grupo Ezentis. But the stock apears to be less risky and, when comparing its historical volatility, Labiana Health SA is 1.62 times less risky than Grupo Ezentis. The stock trades about -0.01 of its potential returns per unit of risk. The Grupo Ezentis SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.94 in Grupo Ezentis SA on September 3, 2024 and sell it today you would earn a total of 1.06 from holding Grupo Ezentis SA or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.65% |
| Values | Daily Returns |
Labiana Health SA vs. Grupo Ezentis SA
Performance |
| Timeline |
| Labiana Health SA |
| Grupo Ezentis SA |
Labiana Health and Grupo Ezentis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labiana Health and Grupo Ezentis
The main advantage of trading using opposite Labiana Health and Grupo Ezentis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labiana Health position performs unexpectedly, Grupo Ezentis 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 Grupo Ezentis will offset losses from the drop in Grupo Ezentis' long position.| Labiana Health vs. Aedas Homes SL | Labiana Health vs. Squirrel Media SA | Labiana Health vs. Parlem Telecom Companyia | Labiana Health vs. Tier1 Technology SA |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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