Correlation Between EHEALTH and PUBLIC STORAGE

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

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

Diversification Opportunities for EHEALTH and PUBLIC STORAGE

-0.68

Correlation Coefficient

EHEALTH  PUBLIC STORAGE

Excellent diversification

The 3 months correlation between EHEALTH and PUBLIC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and PUBLIC STORAGE PRFO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC STORAGE PRFO and EHEALTH 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 EHEALTH are associated (or correlated) with PUBLIC STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUBLIC STORAGE PRFO has no effect on the direction of EHEALTH i.e., EHEALTH and PUBLIC STORAGE go up and down completely randomly.

Pair Corralation between EHEALTH and PUBLIC STORAGE

Assuming the 90 days trading horizon EHEALTH is expected to generate 11.56 times more return on investment than PUBLIC STORAGE. However, EHEALTH is 11.56 times more volatile than PUBLIC STORAGE PRFO. It trades about 0.27 of its potential returns per unit of risk. PUBLIC STORAGE PRFO is currently generating about -0.12 per unit of risk. If you would invest  478.00  in EHEALTH on September 22, 2024 and sell it today you would earn a total of  301.00  from holding EHEALTH or generate 62.97% return on investment over 90 days.

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

EHEALTH  vs.  PUBLIC STORAGE PRFO

EHEALTH

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EHEALTH are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, EHEALTH exhibited solid returns over the last few months and may actually be approaching a breakup point.

PUBLIC STORAGE PRFO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PUBLIC STORAGE PRFO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PUBLIC STORAGE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EHEALTH and PUBLIC STORAGE

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

The idea behind EHEALTH and PUBLIC STORAGE PRFO 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.