Correlation Between Cue Health and Etao International

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

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

Diversification Opportunities for Cue Health and Etao International

0.76

Correlation Coefficient

Cue Health  Etao International

Poor diversification

The 3 months correlation between Cue and Etao is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cue Health and Etao International Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etao International Co, and Cue 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 Cue Health are associated (or correlated) with Etao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etao International Co, has no effect on the direction of Cue Health i.e., Cue Health and Etao International go up and down completely randomly.

Pair Corralation between Cue Health and Etao International

If you would invest  5.00  in Etao International Co, on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Etao International Co, or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Cue Health  vs.  Etao International Co,

Cue Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cue Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cue Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Etao International Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Etao International Co, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Etao International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cue Health and Etao International

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

The idea behind Cue Health and Etao International Co, 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.