Correlation Between Reliq Health and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both Reliq 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 Reliq 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 Reliq Health Technologies and EGF Theramed Health, you can compare the effects of market volatilities on Reliq 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 Reliq Health with a short position of EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliq Health and EGF Theramed.
Diversification Opportunities for Reliq Health and EGF Theramed
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Reliq and EGF is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Reliq Health Technologies 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 Reliq 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 Reliq Health Technologies 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 Reliq Health i.e., Reliq Health and EGF Theramed go up and down completely randomly.
Pair Corralation between Reliq Health and EGF Theramed
Assuming the 90 days horizon Reliq Health Technologies is expected to generate 1.92 times more return on investment than EGF Theramed. However, Reliq Health is 1.92 times more volatile than EGF Theramed Health. It trades about 0.32 of its potential returns per unit of risk. EGF Theramed Health is currently generating about 0.27 per unit of risk. If you would invest 0.01 in Reliq Health Technologies on August 31, 2024 and sell it today you would earn a total of 0.10 from holding Reliq Health Technologies or generate 1000.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliq Health Technologies vs. EGF Theramed Health
Performance |
| Timeline |
| Reliq Health Technologies |
| EGF Theramed Health |
Reliq Health and EGF Theramed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliq Health and EGF Theramed
The main advantage of trading using opposite Reliq Health and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliq 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.| Reliq Health vs. GE HealthCare Technologies | Reliq Health vs. Veeva Systems Class | Reliq Health vs. M3 Inc | Reliq Health vs. M3 Inc |
| EGF Theramed vs. GE HealthCare Technologies | EGF Theramed vs. Veeva Systems Class | EGF Theramed vs. M3 Inc | EGF Theramed vs. M3 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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