Correlation Between East Side and NeuPath Health

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

By analyzing existing cross correlation between East Side Games and NeuPath Health, you can compare the effects of market volatilities on East Side and NeuPath Health 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 East Side with a short position of NeuPath Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and NeuPath Health.

Diversification Opportunities for East Side and NeuPath Health

0.36

Correlation Coefficient

East Side  NeuPath Health

Weak diversification

The 3 months correlation between East and NeuPath is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games and NeuPath Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeuPath Health and East Side 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 East Side Games are associated (or correlated) with NeuPath Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeuPath Health has no effect on the direction of East Side i.e., East Side and NeuPath Health go up and down completely randomly.

Pair Corralation between East Side and NeuPath Health

Assuming the 90 days trading horizon East Side Games is expected to under-perform the NeuPath Health. In addition to that, East Side is 1.02 times more volatile than NeuPath Health. It trades about -0.08 of its total potential returns per unit of risk. NeuPath Health is currently generating about -0.04 per unit of volatility. If you would invest  19.00  in NeuPath Health on September 4, 2024 and sell it today you would lose (2.00) from holding NeuPath Health or give up 10.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

East Side Games  vs.  NeuPath Health

East Side Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days East Side Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

NeuPath Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NeuPath Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with East Side and NeuPath Health

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

The idea behind East Side Games and NeuPath Health 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.