Correlation Between CCL Products and Entero Healthcare

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

By analyzing existing cross correlation between CCL Products Limited and Entero Healthcare Solutions, you can compare the effects of market volatilities on CCL Products and Entero 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 CCL Products with a short position of Entero Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Products and Entero Healthcare.

Diversification Opportunities for CCL Products and Entero Healthcare

0.84

Correlation Coefficient

CCL Products  Entero Healthcare

Very poor diversification

The 3 months correlation between CCL and Entero is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CCL Products Limited and Entero Healthcare Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entero Healthcare and CCL Products 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 CCL Products Limited are associated (or correlated) with Entero Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entero Healthcare has no effect on the direction of CCL Products i.e., CCL Products and Entero Healthcare go up and down completely randomly.

Pair Corralation between CCL Products and Entero Healthcare

Assuming the 90 days trading horizon CCL Products Limited is expected to under-perform the Entero Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, CCL Products Limited is 1.22 times less risky than Entero Healthcare. The stock trades about -0.17 of its potential returns per unit of risk. The Entero Healthcare Solutions is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  143,285  in Entero Healthcare Solutions on December 21, 2024 and sell it today you would lose (26,335) from holding Entero Healthcare Solutions or give up 18.38% of portfolio value over 90 days.

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

CCL Products Limited  vs.  Entero Healthcare Solutions

CCL Products Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCL Products Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Entero Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entero Healthcare Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CCL Products and Entero Healthcare

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

The idea behind CCL Products Limited and Entero Healthcare Solutions 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .