Correlation Between EEducation Albert and Episurf Medical

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

By analyzing existing cross correlation between eEducation Albert AB and Episurf Medical AB, you can compare the effects of market volatilities on EEducation Albert and Episurf Medical 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 EEducation Albert with a short position of Episurf Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EEducation Albert and Episurf Medical.

Diversification Opportunities for EEducation Albert and Episurf Medical

0.39

Correlation Coefficient

EEducation Albert  Episurf Medical

Weak diversification

The 3 months correlation between EEducation and Episurf is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding eEducation Albert AB and Episurf Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episurf Medical AB and EEducation Albert 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 eEducation Albert AB are associated (or correlated) with Episurf Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episurf Medical AB has no effect on the direction of EEducation Albert i.e., EEducation Albert and Episurf Medical go up and down completely randomly.

Pair Corralation between EEducation Albert and Episurf Medical

Assuming the 90 days trading horizon eEducation Albert AB is expected to under-perform the Episurf Medical. But the stock apears to be less risky and, when comparing its historical volatility, eEducation Albert AB is 3.36 times less risky than Episurf Medical. The stock trades about -0.31 of its potential returns per unit of risk. The Episurf Medical AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Episurf Medical AB on October 5, 2024 and sell it today you would earn a total of  1.00  from holding Episurf Medical AB or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

eEducation Albert AB  vs.  Episurf Medical AB

eEducation Albert

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days eEducation Albert AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Episurf Medical AB

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Episurf Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat uncertain forward indicators, Episurf Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EEducation Albert and Episurf Medical

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

The idea behind eEducation Albert AB and Episurf Medical AB 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.