Correlation Between HM HENMAUUNSPADR and EHEALTH
Can any of the company-specific risk be diversified away by investing in both HM HENMAUUNSPADR and EHEALTH 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 HM HENMAUUNSPADR and EHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HM HENMAUUNSPADR 15 and EHEALTH, you can compare the effects of market volatilities on HM HENMAUUNSPADR and EHEALTH 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 HM HENMAUUNSPADR with a short position of EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of HM HENMAUUNSPADR and EHEALTH.
Diversification Opportunities for HM HENMAUUNSPADR and EHEALTH
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HMSA and EHEALTH is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HM HENMAUUNSPADR 15 and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH and HM HENMAUUNSPADR 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 HM HENMAUUNSPADR 15 are associated (or correlated) with EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of HM HENMAUUNSPADR i.e., HM HENMAUUNSPADR and EHEALTH go up and down completely randomly.
Pair Corralation between HM HENMAUUNSPADR and EHEALTH
Assuming the 90 days trading horizon HM HENMAUUNSPADR is expected to generate 8.69 times less return on investment than EHEALTH. But when comparing it to its historical volatility, HM HENMAUUNSPADR 15 is 1.82 times less risky than EHEALTH. It trades about 0.04 of its potential returns per unit of risk. EHEALTH is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 339.00 in EHEALTH on September 8, 2024 and sell it today you would earn a total of 168.00 from holding EHEALTH or generate 49.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.48% |
Values | Daily Returns |
HM HENMAUUNSPADR 15 vs. EHEALTH
Performance |
Timeline |
HM HENMAUUNSPADR |
EHEALTH |
HM HENMAUUNSPADR and EHEALTH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HM HENMAUUNSPADR and EHEALTH
The main advantage of trading using opposite HM HENMAUUNSPADR and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HM HENMAUUNSPADR position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.HM HENMAUUNSPADR vs. SLR Investment Corp | HM HENMAUUNSPADR vs. Texas Roadhouse | HM HENMAUUNSPADR vs. PennyMac Mortgage Investment | HM HENMAUUNSPADR vs. ECHO INVESTMENT ZY |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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