Correlation Between Empower Clinics and ESE Entertainment

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

By analyzing existing cross correlation between Empower Clinics and ESE Entertainment, you can compare the effects of market volatilities on Empower Clinics and ESE Entertainment 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 ESE Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empower Clinics and ESE Entertainment.

Diversification Opportunities for Empower Clinics and ESE Entertainment

0.0

Correlation Coefficient

Empower Clinics  ESE Entertainment

Pay attention - limited upside

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

Pair Corralation between Empower Clinics and ESE Entertainment

If you would invest  0.01  in Empower Clinics on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Empower Clinics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Empower Clinics  vs.  ESE Entertainment

Empower Clinics

Risk-Adjusted Performance

0 of 100

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.

ESE Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESE Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Empower Clinics and ESE Entertainment

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

The idea behind Empower Clinics and ESE Entertainment 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.