Correlation Between EUDA Health and Weave Communications

Can any of the company-specific risk be diversified away by investing in both EUDA Health and Weave Communications 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 Weave Communications 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 Weave Communications, you can compare the effects of market volatilities on EUDA Health and Weave Communications 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 Weave Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of EUDA Health and Weave Communications.

Diversification Opportunities for EUDA Health and Weave Communications

0.36

Correlation Coefficient

EUDA Health  Weave Communications

Weak diversification

The 3 months correlation between EUDA and Weave is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding EUDA Health Holdings and Weave Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weave Communications 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 Weave Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weave Communications has no effect on the direction of EUDA Health i.e., EUDA Health and Weave Communications go up and down completely randomly.

Pair Corralation between EUDA Health and Weave Communications

Given the investment horizon of 90 days EUDA Health Holdings is expected to generate 1.48 times more return on investment than Weave Communications. However, EUDA Health is 1.48 times more volatile than Weave Communications. It trades about -0.03 of its potential returns per unit of risk. Weave Communications is currently generating about -0.16 per unit of risk. If you would invest  457.00  in EUDA Health Holdings on December 27, 2024 and sell it today you would lose (68.00) from holding EUDA Health Holdings or give up 14.88% of portfolio value over 90 days.

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

EUDA Health Holdings  vs.  Weave Communications

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.

Weave Communications

Risk-Adjusted Performance

Very Weak

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

Pair Trading with EUDA Health and Weave Communications

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

The idea behind EUDA Health Holdings and Weave Communications 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.