Correlation Between Entia Biosciences and Pacer Financial

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

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

Diversification Opportunities for Entia Biosciences and Pacer Financial

0.0

Correlation Coefficient

Entia Biosciences  Pacer Financial

Pay attention - limited upside

The 3 months correlation between Entia and Pacer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Entia Biosciences and Pacer Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Financial and Entia Biosciences 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 Entia Biosciences are associated (or correlated) with Pacer Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Financial has no effect on the direction of Entia Biosciences i.e., Entia Biosciences and Pacer Financial go up and down completely randomly.

Pair Corralation between Entia Biosciences and Pacer Financial

If you would invest (100.00) in Pacer Financial on December 18, 2024 and sell it today you would earn a total of  100.00  from holding Pacer Financial or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Entia Biosciences  vs.  Pacer Financial

Entia Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entia Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pacer Financial

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Entia Biosciences and Pacer Financial

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

The idea behind Entia Biosciences and Pacer Financial 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.