Correlation Between Trellus Health and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Trellus Health and Ecclesiastical Insurance 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 Trellus Health and Ecclesiastical Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trellus Health plc and Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Trellus Health and Ecclesiastical Insurance 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 Trellus Health with a short position of Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellus Health and Ecclesiastical Insurance.
Diversification Opportunities for Trellus Health and Ecclesiastical Insurance
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trellus and Ecclesiastical is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health plc and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance and Trellus 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 Trellus Health plc are associated (or correlated) with Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Trellus Health i.e., Trellus Health and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Trellus Health and Ecclesiastical Insurance
Assuming the 90 days trading horizon Trellus Health plc is expected to generate 166.43 times more return on investment than Ecclesiastical Insurance. However, Trellus Health is 166.43 times more volatile than Ecclesiastical Insurance Office. It trades about 0.21 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about -0.02 per unit of risk. If you would invest 57.00 in Trellus Health plc on October 25, 2024 and sell it today you would earn a total of 178.00 from holding Trellus Health plc or generate 312.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trellus Health plc vs. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Trellus Health plc |
| Ecclesiastical Insurance |
Trellus Health and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trellus Health and Ecclesiastical Insurance
The main advantage of trading using opposite Trellus Health and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellus Health position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.| Trellus Health vs. SupplyMe Capital PLC | Trellus Health vs. SM Energy Co | Trellus Health vs. FuelCell Energy | Trellus Health vs. Grand Vision Media |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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