Correlation Between EHEALTH and Rogers Communications
Can any of the company-specific risk be diversified away by investing in both EHEALTH and Rogers Communications 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 Rogers Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Rogers Communications, you can compare the effects of market volatilities on EHEALTH and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Rogers Communications.
Diversification Opportunities for EHEALTH and Rogers Communications
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EHEALTH and Rogers is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of EHEALTH i.e., EHEALTH and Rogers Communications go up and down completely randomly.
Pair Corralation between EHEALTH and Rogers Communications
Assuming the 90 days trading horizon EHEALTH is expected to generate 3.84 times more return on investment than Rogers Communications. However, EHEALTH is 3.84 times more volatile than Rogers Communications. It trades about 0.04 of its potential returns per unit of risk. Rogers Communications is currently generating about -0.01 per unit of risk. If you would invest 432.00 in EHEALTH on September 3, 2024 and sell it today you would earn a total of 63.00 from holding EHEALTH or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EHEALTH vs. Rogers Communications
Performance |
| Timeline |
| EHEALTH |
| Rogers Communications |
EHEALTH and Rogers Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and Rogers Communications
The main advantage of trading using opposite EHEALTH and Rogers Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, Rogers Communications 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 Rogers Communications will offset losses from the drop in Rogers Communications' long position.The idea behind EHEALTH and Rogers Communications 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.| Rogers Communications vs. Pembina Pipeline Corp | Rogers Communications vs. EHEALTH | Rogers Communications vs. CEOTRONICS | Rogers Communications vs. FEMALE HEALTH |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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