Correlation Between Step One and Epsilon Healthcare

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

By analyzing existing cross correlation between Step One Clothing and Epsilon Healthcare, you can compare the effects of market volatilities on Step One and Epsilon Healthcare 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 Step One with a short position of Epsilon Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and Epsilon Healthcare.

Diversification Opportunities for Step One and Epsilon Healthcare

0.0

Correlation Coefficient

Step One  Epsilon Healthcare

Pay attention - limited upside

The 3 months correlation between Step and Epsilon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing and Epsilon Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon Healthcare and Step One 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 Step One Clothing are associated (or correlated) with Epsilon Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epsilon Healthcare has no effect on the direction of Step One i.e., Step One and Epsilon Healthcare go up and down completely randomly.

Pair Corralation between Step One and Epsilon Healthcare

If you would invest  129.00  in Step One Clothing on September 18, 2024 and sell it today you would earn a total of  3.00  from holding Step One Clothing or generate 2.33% return on investment over 90 days.

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

Step One Clothing  vs.  Epsilon Healthcare

Step One Clothing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Step One Clothing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Epsilon Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Epsilon Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Epsilon Healthcare is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Step One and Epsilon Healthcare

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

The idea behind Step One Clothing and Epsilon Healthcare 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.