Correlation Between Intercure and Epitomee Medical

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

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

Diversification Opportunities for Intercure and Epitomee Medical

-0.66

Correlation Coefficient

Intercure  Epitomee Medical

Excellent diversification

The 3 months correlation between Intercure and Epitomee is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intercure and Epitomee Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epitomee Medical and Intercure 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 Intercure are associated (or correlated) with Epitomee Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epitomee Medical has no effect on the direction of Intercure i.e., Intercure and Epitomee Medical go up and down completely randomly.

Pair Corralation between Intercure and Epitomee Medical

Assuming the 90 days trading horizon Intercure is expected to under-perform the Epitomee Medical. But the stock apears to be less risky and, when comparing its historical volatility, Intercure is 1.09 times less risky than Epitomee Medical. The stock trades about -0.42 of its potential returns per unit of risk. The Epitomee Medical is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  101,600  in Epitomee Medical on September 1, 2024 and sell it today you would lose (10,790) from holding Epitomee Medical or give up 10.62% of portfolio value over 90 days.

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

Intercure  vs.  Epitomee Medical

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Epitomee Medical

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Epitomee Medical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Epitomee Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intercure and Epitomee Medical

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

The idea behind Intercure and Epitomee Medical 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 Transaction History module to view history of all your transactions and understand their impact on performance.