Correlation Between EHEALTH and Paragon Banking

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

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

Diversification Opportunities for EHEALTH and Paragon Banking

0.0

Correlation Coefficient

EHEALTH  Paragon Banking

Pay attention - limited upside

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

Pair Corralation between EHEALTH and Paragon Banking

Assuming the 90 days trading horizon EHEALTH is expected to under-perform the Paragon Banking. In addition to that, EHEALTH is 2.39 times more volatile than Paragon Banking Group. It trades about 0.0 of its total potential returns per unit of risk. Paragon Banking Group is currently generating about 0.13 per unit of volatility. If you would invest  535.00  in Paragon Banking Group on September 14, 2024 and sell it today you would earn a total of  420.00  from holding Paragon Banking Group or generate 78.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.64%
Values	Daily Returns

EHEALTH  vs.  Paragon Banking Group

EHEALTH

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EHEALTH are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, EHEALTH exhibited solid returns over the last few months and may actually be approaching a breakup point.

Paragon Banking Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paragon Banking Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Paragon Banking may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with EHEALTH and Paragon Banking

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

The idea behind EHEALTH and Paragon Banking Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.