Correlation Between EPSILON HEALTHCARE and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and Goldman Sachs 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 EPSILON HEALTHCARE and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EPSILON HEALTHCARE LTD and The Goldman Sachs, you can compare the effects of market volatilities on EPSILON HEALTHCARE and Goldman Sachs 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 EPSILON HEALTHCARE with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Goldman Sachs.

Diversification Opportunities for EPSILON HEALTHCARE and Goldman Sachs

0.0

Correlation Coefficient

EPSILON HEALTHCARE  Goldman Sachs

Pay attention - limited upside

The 3 months correlation between EPSILON and Goldman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs and EPSILON HEALTHCARE 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 EPSILON HEALTHCARE LTD are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and Goldman Sachs go up and down completely randomly.

Pair Corralation between EPSILON HEALTHCARE and Goldman Sachs

If you would invest  44,293  in The Goldman Sachs on September 4, 2024 and sell it today you would earn a total of  12,907  from holding The Goldman Sachs or generate 29.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

EPSILON HEALTHCARE LTD  vs.  The Goldman Sachs

EPSILON HEALTHCARE LTD

Risk-Adjusted Performance

0 of 100

Very Weak

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

Goldman Sachs

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Goldman Sachs are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goldman Sachs reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EPSILON HEALTHCARE and Goldman Sachs

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

The idea behind EPSILON HEALTHCARE LTD and The Goldman Sachs 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.