Correlation Between Erech Finance and Intercure

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

By analyzing existing cross correlation between Erech Finance Cahalacha and Intercure, you can compare the effects of market volatilities on Erech Finance and Intercure 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 Erech Finance with a short position of Intercure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erech Finance and Intercure.

Diversification Opportunities for Erech Finance and Intercure

0.6

Correlation Coefficient

Erech Finance  Intercure

Poor diversification

The 3 months correlation between Erech and Intercure is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Erech Finance Cahalacha and Intercure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercure and Erech Finance 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 Erech Finance Cahalacha are associated (or correlated) with Intercure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercure has no effect on the direction of Erech Finance i.e., Erech Finance and Intercure go up and down completely randomly.

Pair Corralation between Erech Finance and Intercure

Assuming the 90 days trading horizon Erech Finance Cahalacha is expected to generate 1.2 times more return on investment than Intercure. However, Erech Finance is 1.2 times more volatile than Intercure. It trades about -0.02 of its potential returns per unit of risk. Intercure is currently generating about -0.03 per unit of risk. If you would invest  22,200  in Erech Finance Cahalacha on September 28, 2024 and sell it today you would lose (2,600) from holding Erech Finance Cahalacha or give up 11.71% of portfolio value over 90 days.

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

Erech Finance Cahalacha  vs.  Intercure

Erech Finance Cahalacha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Erech Finance Cahalacha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Erech Finance and Intercure

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

The idea behind Erech Finance Cahalacha and Intercure 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.