Correlation Between Service International and E Home

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

By analyzing existing cross correlation between Service International and E Home Household Service, you can compare the effects of market volatilities on Service International and E Home 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 Service International with a short position of E Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Service International and E Home.

Diversification Opportunities for Service International and E Home

-0.06

Correlation Coefficient

Service International  E Home

Good diversification

The 3 months correlation between Service and EJH is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Service International and E Home Household Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Home Household and Service International 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 Service International are associated (or correlated) with E Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Home Household has no effect on the direction of Service International i.e., Service International and E Home go up and down completely randomly.

Pair Corralation between Service International and E Home

Considering the 90-day investment horizon Service International is expected to generate 0.12 times more return on investment than E Home. However, Service International is 8.54 times less risky than E Home. It trades about -0.17 of its potential returns per unit of risk. E Home Household Service is currently generating about -0.08 per unit of risk. If you would invest  8,055  in Service International on October 24, 2024 and sell it today you would lose (277.00) from holding Service International or give up 3.44% of portfolio value over 90 days.

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

Service International  vs.  E Home Household Service

Service International

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Service International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Service International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

E Home Household

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Home Household Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Service International and E Home

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

The idea behind Service International and E Home Household Service 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 Global Correlations module to find global opportunities by holding instruments from different markets.