Correlation Between Future Health and ESH Acquisition

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

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

Diversification Opportunities for Future Health and ESH Acquisition

-0.53

Correlation Coefficient

Future Health  ESH Acquisition

Excellent diversification

The 3 months correlation between Future and ESH is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Future Health Esg and ESH Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESH Acquisition Corp and Future 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 Future Health Esg are associated (or correlated) with ESH Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESH Acquisition Corp has no effect on the direction of Future Health i.e., Future Health and ESH Acquisition go up and down completely randomly.

Pair Corralation between Future Health and ESH Acquisition

If you would invest  10.00  in ESH Acquisition Corp on September 15, 2024 and sell it today you would lose (1.00) from holding ESH Acquisition Corp or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.39%
Values	Daily Returns

Future Health Esg  vs.  ESH Acquisition Corp

Future Health Esg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Health Esg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Future Health is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ESH Acquisition Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ESH Acquisition Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, ESH Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Future Health and ESH Acquisition

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

The idea behind Future Health Esg and ESH Acquisition Corp 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 CEOs Directory module to screen CEOs from public companies around the world.