Correlation Between CVR Medical and EPSILON HEALTHCARE

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

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

Diversification Opportunities for CVR Medical and EPSILON HEALTHCARE

-1.0

Correlation Coefficient

CVR Medical  EPSILON HEALTHCARE

Pay attention - limited upside

The 3 months correlation between CVR and EPSILON is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding CVR Medical Corp and EPSILON HEALTHCARE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPSILON HEALTHCARE LTD and CVR Medical 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 CVR Medical Corp are associated (or correlated) with EPSILON HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPSILON HEALTHCARE LTD has no effect on the direction of CVR Medical i.e., CVR Medical and EPSILON HEALTHCARE go up and down completely randomly.

Pair Corralation between CVR Medical and EPSILON HEALTHCARE

If you would invest  0.75  in EPSILON HEALTHCARE LTD on October 4, 2024 and sell it today you would earn a total of  0.00  from holding EPSILON HEALTHCARE LTD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

CVR Medical Corp  vs.  EPSILON HEALTHCARE LTD

CVR Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVR Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CVR Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

EPSILON HEALTHCARE LTD

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with CVR Medical and EPSILON HEALTHCARE

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

The idea behind CVR Medical Corp and EPSILON HEALTHCARE LTD 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.