Correlation Between Super Retail and Epsilon Healthcare

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

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

Diversification Opportunities for Super Retail and Epsilon Healthcare

0.0

Correlation Coefficient

Super Retail  Epsilon Healthcare

Pay attention - limited upside

The 3 months correlation between Super and Epsilon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Epsilon Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon Healthcare and Super Retail 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 Super Retail Group 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 Super Retail i.e., Super Retail and Epsilon Healthcare go up and down completely randomly.

Pair Corralation between Super Retail and Epsilon Healthcare

If you would invest  2.40  in Epsilon Healthcare on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Epsilon Healthcare or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Super Retail Group  vs.  Epsilon Healthcare

Super Retail Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Super Retail Group 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 essential 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 Super Retail and Epsilon Healthcare

The main advantage of trading using opposite Super Retail and Epsilon Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail 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 Super Retail Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.