Correlation Between Andlauer Healthcare and E Split

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

By analyzing existing cross correlation between Andlauer Healthcare Gr and E Split Corp, you can compare the effects of market volatilities on Andlauer Healthcare and E Split 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 Andlauer Healthcare with a short position of E Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andlauer Healthcare and E Split.

Diversification Opportunities for Andlauer Healthcare and E Split

0.62

Correlation Coefficient

Andlauer Healthcare  E Split

Poor diversification

The 3 months correlation between Andlauer and ENS-PA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Andlauer Healthcare Gr and E Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Split Corp and Andlauer 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 Andlauer Healthcare Gr are associated (or correlated) with E Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Split Corp has no effect on the direction of Andlauer Healthcare i.e., Andlauer Healthcare and E Split go up and down completely randomly.

Pair Corralation between Andlauer Healthcare and E Split

Assuming the 90 days trading horizon Andlauer Healthcare Gr is expected to generate 1.5 times more return on investment than E Split. However, Andlauer Healthcare is 1.5 times more volatile than E Split Corp. It trades about 0.17 of its potential returns per unit of risk. E Split Corp is currently generating about 0.13 per unit of risk. If you would invest  4,224  in Andlauer Healthcare Gr on October 11, 2024 and sell it today you would earn a total of  159.00  from holding Andlauer Healthcare Gr or generate 3.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Andlauer Healthcare Gr  vs.  E Split Corp

Andlauer Healthcare

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Andlauer Healthcare Gr are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Andlauer Healthcare displayed solid returns over the last few months and may actually be approaching a breakup point.

E Split Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, E Split may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Andlauer Healthcare and E Split

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

The idea behind Andlauer Healthcare Gr and E Split 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.