Correlation Between Harvard Apparatus and Encision

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

By analyzing existing cross correlation between Harvard Apparatus Regenerative and Encision, you can compare the effects of market volatilities on Harvard Apparatus and Encision 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 Harvard Apparatus with a short position of Encision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvard Apparatus and Encision.

Diversification Opportunities for Harvard Apparatus and Encision

-0.35

Correlation Coefficient

Harvard Apparatus  Encision

Very good diversification

The 3 months correlation between Harvard and Encision is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Harvard Apparatus Regenerative and Encision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encision and Harvard Apparatus 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 Harvard Apparatus Regenerative are associated (or correlated) with Encision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encision has no effect on the direction of Harvard Apparatus i.e., Harvard Apparatus and Encision go up and down completely randomly.

Pair Corralation between Harvard Apparatus and Encision

Given the investment horizon of 90 days Harvard Apparatus Regenerative is expected to under-perform the Encision. In addition to that, Harvard Apparatus is 1.14 times more volatile than Encision. It trades about -0.06 of its total potential returns per unit of risk. Encision is currently generating about -0.01 per unit of volatility. If you would invest  50.00  in Encision on September 29, 2024 and sell it today you would lose (6.00) from holding Encision or give up 12.0% of portfolio value over 90 days.

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

Harvard Apparatus Regenerative  vs.  Encision

Harvard Apparatus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvard Apparatus Regenerative has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Harvard Apparatus is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Encision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Encision has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Encision is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harvard Apparatus and Encision

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

The idea behind Harvard Apparatus Regenerative and Encision 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.