Correlation Between Avicanna and Entourage Health

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

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

Diversification Opportunities for Avicanna and Entourage Health

0.64

Correlation Coefficient

Avicanna  Entourage Health

Poor diversification

The 3 months correlation between Avicanna and Entourage is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Avicanna and Entourage Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entourage Health Corp and Avicanna 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 Avicanna are associated (or correlated) with Entourage Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entourage Health Corp has no effect on the direction of Avicanna i.e., Avicanna and Entourage Health go up and down completely randomly.

Pair Corralation between Avicanna and Entourage Health

Assuming the 90 days horizon Avicanna is expected to generate 0.68 times more return on investment than Entourage Health. However, Avicanna is 1.47 times less risky than Entourage Health. It trades about 0.02 of its potential returns per unit of risk. Entourage Health Corp is currently generating about -0.06 per unit of risk. If you would invest  24.00  in Avicanna on December 2, 2024 and sell it today you would lose (3.00) from holding Avicanna or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Avicanna  vs.  Entourage Health Corp

Avicanna

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Avicanna are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Avicanna may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Entourage Health Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entourage Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Avicanna and Entourage Health

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

The idea behind Avicanna and Entourage 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.