Correlation Between EHEALTH and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both EHEALTH and Schibsted ASA 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 Schibsted ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Schibsted ASA A, you can compare the effects of market volatilities on EHEALTH and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Schibsted ASA.
Diversification Opportunities for EHEALTH and Schibsted ASA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EHEALTH and Schibsted is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Schibsted ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA A has no effect on the direction of EHEALTH i.e., EHEALTH and Schibsted ASA go up and down completely randomly.
Pair Corralation between EHEALTH and Schibsted ASA
Assuming the 90 days trading horizon EHEALTH is expected to under-perform the Schibsted ASA. In addition to that, EHEALTH is 1.18 times more volatile than Schibsted ASA A. It trades about 0.0 of its total potential returns per unit of risk. Schibsted ASA A is currently generating about 0.11 per unit of volatility. If you would invest 1,301 in Schibsted ASA A on September 15, 2024 and sell it today you would earn a total of 1,903 from holding Schibsted ASA A or generate 146.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.64% |
| Values | Daily Returns |
EHEALTH vs. Schibsted ASA A
Performance |
| Timeline |
| EHEALTH |
| Schibsted ASA A |
EHEALTH and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and Schibsted ASA
The main advantage of trading using opposite EHEALTH and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.The idea behind EHEALTH and Schibsted ASA A 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.| Schibsted ASA vs. National Health Investors | Schibsted ASA vs. EHEALTH | Schibsted ASA vs. Ultra Clean Holdings | Schibsted ASA vs. New Residential Investment |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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