Correlation Between Grey Cloak and Emergent Health

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

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

Diversification Opportunities for Grey Cloak and Emergent Health

0.36

Correlation Coefficient

Grey Cloak  Emergent Health

Weak diversification

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

Pair Corralation between Grey Cloak and Emergent Health

Given the investment horizon of 90 days Grey Cloak Tech is expected to under-perform the Emergent Health. But the otc stock apears to be less risky and, when comparing its historical volatility, Grey Cloak Tech is 1.68 times less risky than Emergent Health. The otc stock trades about -0.07 of its potential returns per unit of risk. The Emergent Health Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.09  in Emergent Health Corp on December 3, 2024 and sell it today you would lose (0.01) from holding Emergent Health Corp or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Grey Cloak Tech  vs.  Emergent Health Corp

Grey Cloak Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grey Cloak Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Emergent Health Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Emergent Health Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Emergent Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grey Cloak and Emergent Health

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

The idea behind Grey Cloak Tech and Emergent 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..