Correlation Between Ceapro and Emmaus Life

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

By analyzing existing cross correlation between Ceapro Inc and Emmaus Life Sciences, you can compare the effects of market volatilities on Ceapro and Emmaus Life 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 Ceapro with a short position of Emmaus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceapro and Emmaus Life.

Diversification Opportunities for Ceapro and Emmaus Life

-0.68

Correlation Coefficient

Ceapro  Emmaus Life

Excellent diversification

The 3 months correlation between Ceapro and Emmaus is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ceapro Inc and Emmaus Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmaus Life Sciences and Ceapro 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 Ceapro Inc are associated (or correlated) with Emmaus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmaus Life Sciences has no effect on the direction of Ceapro i.e., Ceapro and Emmaus Life go up and down completely randomly.

Pair Corralation between Ceapro and Emmaus Life

If you would invest  26.00  in Emmaus Life Sciences on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Emmaus Life Sciences or generate 0.0% return on investment over 90 days.

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

Ceapro Inc  vs.  Emmaus Life Sciences

Ceapro Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Emmaus Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emmaus Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Emmaus Life is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ceapro and Emmaus Life

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

The idea behind Ceapro Inc and Emmaus Life Sciences 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.