Correlation Between Cogstate and EWellness Healthcare

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

By analyzing existing cross correlation between Cogstate Limited and eWellness Healthcare Corp, you can compare the effects of market volatilities on Cogstate and EWellness Healthcare 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 Cogstate with a short position of EWellness Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogstate and EWellness Healthcare.

Diversification Opportunities for Cogstate and EWellness Healthcare

0.0

Correlation Coefficient

Cogstate  EWellness Healthcare

Pay attention - limited upside

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

Pair Corralation between Cogstate and EWellness Healthcare

If you would invest  62.00  in Cogstate Limited on September 14, 2024 and sell it today you would earn a total of  8.00  from holding Cogstate Limited or generate 12.9% return on investment over 90 days.

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

Cogstate Limited  vs.  eWellness Healthcare Corp

Cogstate Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cogstate Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cogstate reported solid returns over the last few months and may actually be approaching a breakup point.

eWellness Healthcare Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days eWellness Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, EWellness Healthcare is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cogstate and EWellness Healthcare

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

The idea behind Cogstate Limited and eWellness Healthcare Corp 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 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.