Correlation Between Nutra Pharma and Emergent Health

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

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

Diversification Opportunities for Nutra Pharma and Emergent Health

-0.12

Correlation Coefficient

Nutra Pharma  Emergent Health

Good diversification

The 3 months correlation between Nutra and Emergent is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nutra Pharma Corp and Emergent Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Health Corp and Nutra Pharma 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 Nutra Pharma Corp are associated (or correlated) with Emergent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Health Corp has no effect on the direction of Nutra Pharma i.e., Nutra Pharma and Emergent Health go up and down completely randomly.

Pair Corralation between Nutra Pharma and Emergent Health

Given the investment horizon of 90 days Nutra Pharma Corp is expected to generate 51.96 times more return on investment than Emergent Health. However, Nutra Pharma is 51.96 times more volatile than Emergent Health Corp. It trades about 0.42 of its potential returns per unit of risk. Emergent Health Corp is currently generating about -0.07 per unit of risk. If you would invest  0.01  in Nutra Pharma Corp on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Nutra Pharma Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	23.44%
Values	Daily Returns

Nutra Pharma Corp  vs.  Emergent Health Corp

Nutra Pharma Corp

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Nutra Pharma Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak technical indicators, Nutra Pharma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Emergent Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emergent Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Nutra Pharma and Emergent Health

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

The idea behind Nutra Pharma Corp and Emergent Health 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.

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.