Correlation Between FIRST SHIP and EPSILON HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and EPSILON HEALTHCARE 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 FIRST SHIP and EPSILON HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and EPSILON HEALTHCARE LTD, you can compare the effects of market volatilities on FIRST SHIP and EPSILON HEALTHCARE 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 FIRST SHIP with a short position of EPSILON HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and EPSILON HEALTHCARE.
Diversification Opportunities for FIRST SHIP and EPSILON HEALTHCARE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FIRST and EPSILON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and EPSILON HEALTHCARE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPSILON HEALTHCARE LTD and FIRST SHIP 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 FIRST SHIP LEASE are associated (or correlated) with EPSILON HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPSILON HEALTHCARE LTD has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and EPSILON HEALTHCARE go up and down completely randomly.
Pair Corralation between FIRST SHIP and EPSILON HEALTHCARE
Assuming the 90 days horizon FIRST SHIP is expected to generate 1.3 times less return on investment than EPSILON HEALTHCARE. But when comparing it to its historical volatility, FIRST SHIP LEASE is 1.25 times less risky than EPSILON HEALTHCARE. It trades about 0.04 of its potential returns per unit of risk. EPSILON HEALTHCARE LTD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.20 in EPSILON HEALTHCARE LTD on October 30, 2024 and sell it today you would lose (0.45) from holding EPSILON HEALTHCARE LTD or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. EPSILON HEALTHCARE LTD
Performance |
| Timeline |
| FIRST SHIP LEASE |
| EPSILON HEALTHCARE LTD |
FIRST SHIP and EPSILON HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and EPSILON HEALTHCARE
The main advantage of trading using opposite FIRST SHIP and EPSILON HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, EPSILON HEALTHCARE 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 EPSILON HEALTHCARE will offset losses from the drop in EPSILON HEALTHCARE's long position.| FIRST SHIP vs. Liberty Broadband | FIRST SHIP vs. Addtech AB | FIRST SHIP vs. NAGOYA RAILROAD | FIRST SHIP vs. Amkor Technology |
| EPSILON HEALTHCARE vs. Tencent Music Entertainment | EPSILON HEALTHCARE vs. MOVIE GAMES SA | EPSILON HEALTHCARE vs. EEDUCATION ALBERT AB | EPSILON HEALTHCARE vs. Warner Music Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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