Correlation Between Incannex Healthcare and Creative Edge

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

By analyzing existing cross correlation between Incannex Healthcare Ltd and Creative Edge Nutrit, you can compare the effects of market volatilities on Incannex Healthcare and Creative Edge 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 Incannex Healthcare with a short position of Creative Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incannex Healthcare and Creative Edge.

Diversification Opportunities for Incannex Healthcare and Creative Edge

0.0

Correlation Coefficient

Incannex Healthcare  Creative Edge

Pay attention - limited upside

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

Pair Corralation between Incannex Healthcare and Creative Edge

If you would invest  174.00  in Incannex Healthcare Ltd on September 15, 2024 and sell it today you would earn a total of  12.00  from holding Incannex Healthcare Ltd or generate 6.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Incannex Healthcare Ltd  vs.  Creative Edge Nutrit

Incannex Healthcare

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Incannex Healthcare Ltd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical indicators, Incannex Healthcare disclosed solid returns over the last few months and may actually be approaching a breakup point.

Creative Edge Nutrit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Edge Nutrit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Creative Edge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Incannex Healthcare and Creative Edge

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

The idea behind Incannex Healthcare Ltd and Creative Edge Nutrit 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.