Correlation Between Haleon Plc and Entourage Health

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

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

Diversification Opportunities for Haleon Plc and Entourage Health

-0.56

Correlation Coefficient

Haleon Plc  Entourage Health

Excellent diversification

The 3 months correlation between Haleon and Entourage is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Entourage Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entourage Health Corp and Haleon Plc 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 Haleon plc are associated (or correlated) with Entourage Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entourage Health Corp has no effect on the direction of Haleon Plc i.e., Haleon Plc and Entourage Health go up and down completely randomly.

Pair Corralation between Haleon Plc and Entourage Health

Assuming the 90 days horizon Haleon plc is expected to generate 0.18 times more return on investment than Entourage Health. However, Haleon plc is 5.46 times less risky than Entourage Health. It trades about 0.04 of its potential returns per unit of risk. Entourage Health Corp is currently generating about -0.01 per unit of risk. If you would invest  481.00  in Haleon plc on December 30, 2024 and sell it today you would earn a total of  23.00  from holding Haleon plc or generate 4.78% return on investment over 90 days.

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

Haleon plc  vs.  Entourage Health Corp

Haleon plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Haleon plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Haleon Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Haleon Plc and Entourage Health

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

The idea behind Haleon plc and Entourage Health Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.