Correlation Between EWellness Healthcare and Cogstate

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

By analyzing existing cross correlation between eWellness Healthcare Corp and Cogstate Limited, you can compare the effects of market volatilities on EWellness Healthcare and Cogstate 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 EWellness Healthcare with a short position of Cogstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of EWellness Healthcare and Cogstate.

Diversification Opportunities for EWellness Healthcare and Cogstate

0.0

Correlation Coefficient

EWellness Healthcare  Cogstate

Pay attention - limited upside

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

Pair Corralation between EWellness Healthcare and Cogstate

If you would invest  63.00  in Cogstate Limited on December 30, 2024 and sell it today you would earn a total of  19.00  from holding Cogstate Limited or generate 30.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

eWellness Healthcare Corp  vs.  Cogstate Limited

eWellness Healthcare Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days eWellness Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, EWellness Healthcare is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Cogstate Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cogstate Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cogstate reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EWellness Healthcare and Cogstate

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

The idea behind eWellness Healthcare Corp and Cogstate Limited 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.