Correlation Between Natural Health and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both Natural Health and EGF Theramed 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 Natural Health and EGF Theramed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Farm and EGF Theramed Health, you can compare the effects of market volatilities on Natural Health and EGF Theramed 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 Natural Health with a short position of EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and EGF Theramed.
Diversification Opportunities for Natural Health and EGF Theramed
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and EGF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Farm and EGF Theramed Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGF Theramed Health and Natural Health 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 Natural Health Farm are associated (or correlated) with EGF Theramed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGF Theramed Health has no effect on the direction of Natural Health i.e., Natural Health and EGF Theramed go up and down completely randomly.
Pair Corralation between Natural Health and EGF Theramed
If you would invest 18.00 in EGF Theramed Health on November 21, 2024 and sell it today you would lose (11.26) from holding EGF Theramed Health or give up 62.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 48.89% |
Values | Daily Returns |
Natural Health Farm vs. EGF Theramed Health
Performance |
Timeline |
Natural Health Farm |
EGF Theramed Health |
Natural Health and EGF Theramed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Natural Health and EGF Theramed
The main advantage of trading using opposite Natural Health and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, EGF Theramed 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 EGF Theramed will offset losses from the drop in EGF Theramed's long position.Natural Health vs. EGF Theramed Health | ||
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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