Correlation Between E L and Carespan Health

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

By analyzing existing cross correlation between E L Financial 3 and Carespan Health, you can compare the effects of market volatilities on E L and Carespan Health 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 E L with a short position of Carespan Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Carespan Health.

Diversification Opportunities for E L and Carespan Health

0.0

Correlation Coefficient

E L  Carespan Health

Pay attention - limited upside

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

Pair Corralation between E L and Carespan Health

If you would invest  2,256  in E L Financial 3 on April 23, 2025 and sell it today you would earn a total of  89.00  from holding E L Financial 3 or generate 3.95% return on investment over 90 days.

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

E L Financial 3  vs.  Carespan Health

E L Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E L Financial 3 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, E L is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Carespan Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carespan Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Carespan Health is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with E L and Carespan Health

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

The idea behind E L Financial 3 and Carespan Health 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.