Correlation Between MSP Recovery and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both MSP Recovery 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 MSP Recovery and EGF Theramed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSP Recovery and EGF Theramed Health, you can compare the effects of market volatilities on MSP Recovery 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 MSP Recovery with a short position of EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSP Recovery and EGF Theramed.
Diversification Opportunities for MSP Recovery and EGF Theramed
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSP and EGF is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding MSP Recovery 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 MSP Recovery 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 MSP Recovery 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 MSP Recovery i.e., MSP Recovery and EGF Theramed go up and down completely randomly.
Pair Corralation between MSP Recovery and EGF Theramed
Given the investment horizon of 90 days MSP Recovery is expected to under-perform the EGF Theramed. But the stock apears to be less risky and, when comparing its historical volatility, MSP Recovery is 3.05 times less risky than EGF Theramed. The stock trades about -0.22 of its potential returns per unit of risk. The EGF Theramed Health is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 5.70 in EGF Theramed Health on August 30, 2024 and sell it today you would earn a total of 15.30 from holding EGF Theramed Health or generate 268.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSP Recovery vs. EGF Theramed Health
Performance |
| Timeline |
| MSP Recovery |
| EGF Theramed Health |
MSP Recovery and EGF Theramed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSP Recovery and EGF Theramed
The main advantage of trading using opposite MSP Recovery and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSP Recovery 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.| MSP Recovery vs. Ecolab Inc | MSP Recovery vs. Axalta Coating Systems | MSP Recovery vs. Chemours Co | MSP Recovery vs. Park Electrochemical |
| EGF Theramed vs. Reliq Health Technologies | EGF Theramed vs. Healthcare Triangle | EGF Theramed vs. Bullfrog AI Holdings, | EGF Theramed vs. Mednow Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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