Correlation Between EHEALTH and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both EHEALTH and WAGNERS HOLDING 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 EHEALTH and WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on EHEALTH and WAGNERS HOLDING 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 EHEALTH with a short position of WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and WAGNERS HOLDING.
Diversification Opportunities for EHEALTH and WAGNERS HOLDING
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EHEALTH and WAGNERS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD and EHEALTH 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 EHEALTH are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of EHEALTH i.e., EHEALTH and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between EHEALTH and WAGNERS HOLDING
Assuming the 90 days trading horizon EHEALTH is expected to generate 2.84 times more return on investment than WAGNERS HOLDING. However, EHEALTH is 2.84 times more volatile than WAGNERS HOLDING LTD. It trades about 0.25 of its potential returns per unit of risk. WAGNERS HOLDING LTD is currently generating about 0.0 per unit of risk. If you would invest 514.00 in EHEALTH on September 27, 2024 and sell it today you would earn a total of 274.00 from holding EHEALTH or generate 53.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EHEALTH vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| EHEALTH |
| WAGNERS HOLDING LTD |
EHEALTH and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and WAGNERS HOLDING
The main advantage of trading using opposite EHEALTH and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.The idea behind EHEALTH and WAGNERS HOLDING LTD 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.| WAGNERS HOLDING vs. Tencent Music Entertainment | WAGNERS HOLDING vs. GAMING FAC SA | WAGNERS HOLDING vs. Seven West Media | WAGNERS HOLDING vs. Live Nation Entertainment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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