Correlation Between Epsilon Healthcare and Metro Mining
Can any of the company-specific risk be diversified away by investing in both Epsilon Healthcare and Metro Mining 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 Metro Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Healthcare and Metro Mining, you can compare the effects of market volatilities on Epsilon Healthcare and Metro Mining 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 Metro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Healthcare and Metro Mining.
Diversification Opportunities for Epsilon Healthcare and Metro Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Epsilon and Metro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Healthcare and Metro Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Mining 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 are associated (or correlated) with Metro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Mining has no effect on the direction of Epsilon Healthcare i.e., Epsilon Healthcare and Metro Mining go up and down completely randomly.
Pair Corralation between Epsilon Healthcare and Metro Mining
Assuming the 90 days trading horizon Epsilon Healthcare is expected to generate 4.25 times less return on investment than Metro Mining. But when comparing it to its historical volatility, Epsilon Healthcare is 1.13 times less risky than Metro Mining. It trades about 0.02 of its potential returns per unit of risk. Metro Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.45 in Metro Mining on September 10, 2024 and sell it today you would earn a total of 4.75 from holding Metro Mining or generate 327.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Epsilon Healthcare vs. Metro Mining
Performance |
Timeline |
Epsilon Healthcare |
Metro Mining |
Epsilon Healthcare and Metro Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Epsilon Healthcare and Metro Mining
The main advantage of trading using opposite Epsilon Healthcare and Metro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Healthcare position performs unexpectedly, Metro Mining 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 Metro Mining will offset losses from the drop in Metro Mining's long position.Epsilon Healthcare vs. Aneka Tambang Tbk | Epsilon Healthcare vs. ANZ Group Holdings | Epsilon Healthcare vs. Macquarie Group | Epsilon Healthcare vs. Commonwealth Bank |
Metro Mining vs. Bluescope Steel | Metro Mining vs. Aneka Tambang Tbk | Metro Mining vs. Perseus Mining | Metro Mining vs. Champion Iron |
Check out your portfolio center.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |