Correlation Between Data#3 and EHEALTH

Can any of the company-specific risk be diversified away by investing in both Data#3 and EHEALTH 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 Data#3 and EHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Data3 Limited and EHEALTH, you can compare the effects of market volatilities on Data#3 and EHEALTH 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 Data#3 with a short position of EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data#3 and EHEALTH.

Diversification Opportunities for Data#3 and EHEALTH

0.15

Correlation Coefficient

Data#3  EHEALTH

Average diversification

The 3 months correlation between Data#3 and EHEALTH is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Data3 Limited and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH and Data#3 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 Data3 Limited are associated (or correlated) with EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of Data#3 i.e., Data#3 and EHEALTH go up and down completely randomly.

Pair Corralation between Data#3 and EHEALTH

Assuming the 90 days horizon Data3 Limited is expected to generate 0.51 times more return on investment than EHEALTH. However, Data3 Limited is 1.98 times less risky than EHEALTH. It trades about 0.0 of its potential returns per unit of risk. EHEALTH is currently generating about -0.01 per unit of risk. If you would invest  479.00  in Data3 Limited on September 14, 2024 and sell it today you would lose (35.00) from holding Data3 Limited or give up 7.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Data3 Limited  vs.  EHEALTH

Data3 Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Data3 Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Data#3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

EHEALTH

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EHEALTH are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, EHEALTH exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Data#3 and EHEALTH

The main advantage of trading using opposite Data#3 and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data#3 position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.

The idea behind Data3 Limited and EHEALTH 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.