Correlation Between EHEALTH and HEALTHCARE REAL
Can any of the company-specific risk be diversified away by investing in both EHEALTH and HEALTHCARE REAL 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 HEALTHCARE REAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and HEALTHCARE REAL A, you can compare the effects of market volatilities on EHEALTH and HEALTHCARE REAL 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 HEALTHCARE REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and HEALTHCARE REAL.
Diversification Opportunities for EHEALTH and HEALTHCARE REAL
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EHEALTH and HEALTHCARE is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and HEALTHCARE REAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE REAL A 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 HEALTHCARE REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE REAL A has no effect on the direction of EHEALTH i.e., EHEALTH and HEALTHCARE REAL go up and down completely randomly.
Pair Corralation between EHEALTH and HEALTHCARE REAL
Assuming the 90 days trading horizon EHEALTH is expected to generate 2.75 times more return on investment than HEALTHCARE REAL. However, EHEALTH is 2.75 times more volatile than HEALTHCARE REAL A. It trades about 0.1 of its potential returns per unit of risk. HEALTHCARE REAL A is currently generating about 0.25 per unit of risk. If you would invest 456.00 in EHEALTH on August 31, 2024 and sell it today you would earn a total of 39.00 from holding EHEALTH or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
EHEALTH vs. HEALTHCARE REAL A
Performance |
| Timeline |
| EHEALTH |
| HEALTHCARE REAL A |
EHEALTH and HEALTHCARE REAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and HEALTHCARE REAL
The main advantage of trading using opposite EHEALTH and HEALTHCARE REAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, HEALTHCARE REAL 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 HEALTHCARE REAL will offset losses from the drop in HEALTHCARE REAL's long position.| EHEALTH vs. SIVERS SEMICONDUCTORS AB | EHEALTH vs. Darden Restaurants | EHEALTH vs. Reliance Steel Aluminum | EHEALTH vs. Q2M Managementberatung AG |
| HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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