Correlation Between NYSE Composite and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and EGF Theramed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and EGF Theramed Health, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and EGF Theramed.
Diversification Opportunities for NYSE Composite and EGF Theramed
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and EGF is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and EGF Theramed go up and down completely randomly.
Pair Corralation between NYSE Composite and EGF Theramed
Assuming the 90 days trading horizon NYSE Composite is expected to generate 57.09 times less return on investment than EGF Theramed. But when comparing it to its historical volatility, NYSE Composite is 50.63 times less risky than EGF Theramed. It trades about 0.24 of its potential returns per unit of risk. EGF Theramed Health is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 5.70 in EGF Theramed Health on August 26, 2024 and sell it today you would earn a total of 15.30 from holding EGF Theramed Health or generate 268.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. EGF Theramed Health
Performance |
| Timeline |
NYSE Composite and EGF Theramed Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
EGF Theramed Health
Pair trading matchups for EGF Theramed
Pair Trading with NYSE Composite and EGF Theramed
The main advantage of trading using opposite NYSE Composite and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| EGF Theramed vs. GE HealthCare Technologies | EGF Theramed vs. Veeva Systems Class | EGF Theramed vs. Solventum Corp | EGF Theramed vs. HealthEquity |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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