Correlation Between NewGenIvf Group and Encompass Health

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

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

Diversification Opportunities for NewGenIvf Group and Encompass Health

-0.3

Correlation Coefficient

NewGenIvf Group  Encompass Health

Very good diversification

The 3 months correlation between NewGenIvf and Encompass is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NewGenIvf Group Limited and Encompass Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encompass Health Corp and NewGenIvf Group 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 NewGenIvf Group Limited are associated (or correlated) with Encompass Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encompass Health Corp has no effect on the direction of NewGenIvf Group i.e., NewGenIvf Group and Encompass Health go up and down completely randomly.

Pair Corralation between NewGenIvf Group and Encompass Health

Given the investment horizon of 90 days NewGenIvf Group Limited is expected to generate 159.92 times more return on investment than Encompass Health. However, NewGenIvf Group is 159.92 times more volatile than Encompass Health Corp. It trades about 0.19 of its potential returns per unit of risk. Encompass Health Corp is currently generating about 0.09 per unit of risk. If you would invest  21,540  in NewGenIvf Group Limited on December 2, 2024 and sell it today you would lose (21,334) from holding NewGenIvf Group Limited or give up 99.04% of portfolio value over 90 days.

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

NewGenIvf Group Limited  vs.  Encompass Health Corp

NewGenIvf Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days NewGenIvf Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Encompass Health Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Encompass Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Encompass Health is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NewGenIvf Group and Encompass Health

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

The idea behind NewGenIvf Group Limited and Encompass 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.