Correlation Between EPSILON HEALTHCARE and Kawasaki Kisen

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Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and Kawasaki Kisen 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 EPSILON HEALTHCARE and Kawasaki Kisen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPSILON HEALTHCARE LTD and Kawasaki Kisen Kaisha, you can compare the effects of market volatilities on EPSILON HEALTHCARE and Kawasaki Kisen 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 EPSILON HEALTHCARE with a short position of Kawasaki Kisen. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Kawasaki Kisen.

Diversification Opportunities for EPSILON HEALTHCARE and Kawasaki Kisen

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between EPSILON HEALTHCARE and Kawasaki Kisen

Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 4.86 times more return on investment than Kawasaki Kisen. However, EPSILON HEALTHCARE is 4.86 times more volatile than Kawasaki Kisen Kaisha. It trades about 0.05 of its potential returns per unit of risk. Kawasaki Kisen Kaisha is currently generating about 0.06 per unit of risk. If you would invest  1.15  in EPSILON HEALTHCARE LTD on October 11, 2024 and sell it today you would lose (0.40) from holding EPSILON HEALTHCARE LTD or give up 34.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

EPSILON HEALTHCARE LTD  vs.  Kawasaki Kisen Kaisha

 Performance 
       Timeline  
EPSILON HEALTHCARE LTD 

Risk-Adjusted Performance

0 of 100

 
Weak
 
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Very Weak
Over the last 90 days EPSILON HEALTHCARE LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, EPSILON HEALTHCARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Kawasaki Kisen Kaisha 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Kawasaki Kisen Kaisha are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Kawasaki Kisen may actually be approaching a critical reversion point that can send shares even higher in February 2025.

EPSILON HEALTHCARE and Kawasaki Kisen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EPSILON HEALTHCARE and Kawasaki Kisen

The main advantage of trading using opposite EPSILON HEALTHCARE and Kawasaki Kisen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, Kawasaki Kisen 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 Kawasaki Kisen will offset losses from the drop in Kawasaki Kisen's long position.
The idea behind EPSILON HEALTHCARE LTD and Kawasaki Kisen Kaisha 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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