Correlation Between ESE Entertainment and WELL Health

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

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

Diversification Opportunities for ESE Entertainment and WELL Health

-0.87

Correlation Coefficient

ESE Entertainment  WELL Health

Pay attention - limited upside

The 3 months correlation between ESE and WELL is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding ESE Entertainment and WELL Health Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELL Health Technologies and ESE Entertainment 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 ESE Entertainment are associated (or correlated) with WELL Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELL Health Technologies has no effect on the direction of ESE Entertainment i.e., ESE Entertainment and WELL Health go up and down completely randomly.

Pair Corralation between ESE Entertainment and WELL Health

Assuming the 90 days horizon ESE Entertainment is expected to generate 8.68 times less return on investment than WELL Health. In addition to that, ESE Entertainment is 1.84 times more volatile than WELL Health Technologies. It trades about 0.02 of its total potential returns per unit of risk. WELL Health Technologies is currently generating about 0.29 per unit of volatility. If you would invest  637.00  in WELL Health Technologies on October 5, 2024 and sell it today you would earn a total of  79.00  from holding WELL Health Technologies or generate 12.4% return on investment over 90 days.

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

ESE Entertainment  vs.  WELL Health Technologies

ESE Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESE Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

WELL Health Technologies

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WELL Health Technologies are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, WELL Health displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ESE Entertainment and WELL Health

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

The idea behind ESE Entertainment and WELL Health Technologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.