Correlation Between Entourage Health and Body

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

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

Diversification Opportunities for Entourage Health and Body

0.18

Correlation Coefficient

Entourage Health  Body

Average diversification

The 3 months correlation between Entourage and Body is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Body And Mind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Body And Mind and Entourage Health 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 Entourage Health Corp are associated (or correlated) with Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Body And Mind has no effect on the direction of Entourage Health i.e., Entourage Health and Body go up and down completely randomly.

Pair Corralation between Entourage Health and Body

Assuming the 90 days horizon Entourage Health Corp is expected to under-perform the Body. But the pink sheet apears to be less risky and, when comparing its historical volatility, Entourage Health Corp is 1.99 times less risky than Body. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Body And Mind is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1.24  in Body And Mind on December 29, 2024 and sell it today you would lose (0.46) from holding Body And Mind or give up 37.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	53.23%
Values	Daily Returns

Entourage Health Corp  vs.  Body And Mind

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.

Body And Mind

Risk-Adjusted Performance

Modest

Over the last 90 days Body And Mind has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively fragile primary indicators, Body revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entourage Health and Body

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

The idea behind Entourage Health Corp and Body And Mind 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.