Correlation Between Sentage Holdings and EZFL Old

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

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

Diversification Opportunities for Sentage Holdings and EZFL Old

0.01

Correlation Coefficient

Sentage Holdings  EZFL Old

Significant diversification

The 3 months correlation between Sentage and EZFL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sentage Holdings and EZFL Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZFL Old and Sentage Holdings 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 Sentage Holdings are associated (or correlated) with EZFL Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZFL Old has no effect on the direction of Sentage Holdings i.e., Sentage Holdings and EZFL Old go up and down completely randomly.

Pair Corralation between Sentage Holdings and EZFL Old

Given the investment horizon of 90 days Sentage Holdings is expected to generate 23.75 times less return on investment than EZFL Old. But when comparing it to its historical volatility, Sentage Holdings is 1.47 times less risky than EZFL Old. It trades about 0.0 of its potential returns per unit of risk. EZFL Old is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  332.00  in EZFL Old on December 29, 2024 and sell it today you would earn a total of  18.00  from holding EZFL Old or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	52.46%
Values	Daily Returns

Sentage Holdings  vs.  EZFL Old

Sentage Holdings

Risk-Adjusted Performance

Very Weak

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

EZFL Old

Risk-Adjusted Performance

Insignificant

Over the last 90 days EZFL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite conflicting technical and fundamental indicators, EZFL Old disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sentage Holdings and EZFL Old

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

The idea behind Sentage Holdings and EZFL Old 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 Stocks Directory module to find actively traded stocks across global markets.