Correlation Between EUDA Health and Regional Health

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

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

Diversification Opportunities for EUDA Health and Regional Health

-0.23

Correlation Coefficient

EUDA Health  Regional Health

Very good diversification

The 3 months correlation between EUDA and Regional is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding EUDA Health Holdings and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop and EUDA 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 EUDA Health Holdings are associated (or correlated) with Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of EUDA Health i.e., EUDA Health and Regional Health go up and down completely randomly.

Pair Corralation between EUDA Health and Regional Health

Given the investment horizon of 90 days EUDA Health Holdings is expected to under-perform the Regional Health. But the stock apears to be less risky and, when comparing its historical volatility, EUDA Health Holdings is 5.95 times less risky than Regional Health. The stock trades about -0.02 of its potential returns per unit of risk. The Regional Health Properties is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  153.00  in Regional Health Properties on December 28, 2024 and sell it today you would earn a total of  79.00  from holding Regional Health Properties or generate 51.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	41.67%
Values	Daily Returns

EUDA Health Holdings  vs.  Regional Health Properties

EUDA Health Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days EUDA Health Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Regional Health Prop

Risk-Adjusted Performance

Good

Over the last 90 days Regional Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak technical indicators, Regional Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EUDA Health and Regional Health

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

The idea behind EUDA Health Holdings and Regional Health Properties 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.