Correlation Between Entourage Health and Cansortium

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

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

Diversification Opportunities for Entourage Health and Cansortium

0.81

Correlation Coefficient

Entourage Health  Cansortium

Very poor diversification

The 3 months correlation between Entourage and Cansortium is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Cansortium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cansortium and Entourage Health 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 Entourage Health Corp are associated (or correlated) with Cansortium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cansortium has no effect on the direction of Entourage Health i.e., Entourage Health and Cansortium go up and down completely randomly.

Pair Corralation between Entourage Health and Cansortium

Assuming the 90 days horizon Entourage Health Corp is expected to generate 2.33 times more return on investment than Cansortium. However, Entourage Health is 2.33 times more volatile than Cansortium. It trades about 0.04 of its potential returns per unit of risk. Cansortium is currently generating about -0.02 per unit of risk. If you would invest  0.85  in Entourage Health Corp on September 2, 2024 and sell it today you would lose (0.35) from holding Entourage Health Corp or give up 41.18% of portfolio value over 90 days.

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

Entourage Health Corp  vs.  Cansortium

Entourage Health Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Entourage Health Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Entourage Health reported solid returns over the last few months and may actually be approaching a breakup point.

Cansortium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cansortium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's primary 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 Entourage Health and Cansortium

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

The idea behind Entourage Health Corp and Cansortium 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.