Correlation Between TWFG, and EHealth

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

By analyzing existing cross correlation between TWFG, Class A and eHealth, you can compare the effects of market volatilities on TWFG, and EHealth 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 TWFG, with a short position of EHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of TWFG, and EHealth.

Diversification Opportunities for TWFG, and EHealth

-0.06

Correlation Coefficient

TWFG,  EHealth

Good diversification

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

Pair Corralation between TWFG, and EHealth

Given the investment horizon of 90 days TWFG, Class A is expected to generate 0.59 times more return on investment than EHealth. However, TWFG, Class A is 1.71 times less risky than EHealth. It trades about 0.1 of its potential returns per unit of risk. eHealth is currently generating about 0.02 per unit of risk. If you would invest  2,201  in TWFG, Class A on October 3, 2024 and sell it today you would earn a total of  712.00  from holding TWFG, Class A or generate 32.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.59%
Values	Daily Returns

TWFG, Class A  vs.  eHealth

TWFG, Class A

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, TWFG, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

eHealth

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in eHealth are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, EHealth demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TWFG, and EHealth

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

The idea behind TWFG, Class A and eHealth 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.