Correlation Between Empower Clinics and Ensign

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

By analyzing existing cross correlation between Empower Clinics and The Ensign Group, you can compare the effects of market volatilities on Empower Clinics and Ensign 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 Empower Clinics with a short position of Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empower Clinics and Ensign.

Diversification Opportunities for Empower Clinics and Ensign

0.0

Correlation Coefficient

Empower Clinics  Ensign

Pay attention - limited upside

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

Pair Corralation between Empower Clinics and Ensign

Assuming the 90 days horizon Empower Clinics is expected to generate 149.65 times more return on investment than Ensign. However, Empower Clinics is 149.65 times more volatile than The Ensign Group. It trades about 0.24 of its potential returns per unit of risk. The Ensign Group is currently generating about 0.06 per unit of risk. If you would invest  7.50  in Empower Clinics on September 30, 2024 and sell it today you would lose (7.49) from holding Empower Clinics or give up 99.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	59.76%
Values	Daily Returns

Empower Clinics  vs.  The Ensign Group

Empower Clinics

Risk-Adjusted Performance

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Very Weak

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

Ensign Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Empower Clinics and Ensign

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

The idea behind Empower Clinics and The Ensign Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..