Correlation Between Value Capital and Epitomee Medical

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

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

Diversification Opportunities for Value Capital and Epitomee Medical

-0.29

Correlation Coefficient

Value Capital  Epitomee Medical

Very good diversification

The 3 months correlation between Value and Epitomee is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Value Capital One and Epitomee Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epitomee Medical and Value Capital 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 Value Capital One 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 Value Capital i.e., Value Capital and Epitomee Medical go up and down completely randomly.

Pair Corralation between Value Capital and Epitomee Medical

Assuming the 90 days trading horizon Value Capital One is expected to generate 0.88 times more return on investment than Epitomee Medical. However, Value Capital One is 1.14 times less risky than Epitomee Medical. It trades about 0.29 of its potential returns per unit of risk. Epitomee Medical is currently generating about 0.05 per unit of risk. If you would invest  3,530  in Value Capital One on April 25, 2025 and sell it today you would earn a total of  1,710  from holding Value Capital One or generate 48.44% return on investment over 90 days.

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

Value Capital One  vs.  Epitomee Medical

Value Capital One

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Value Capital One are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Value Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Epitomee Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Epitomee Medical are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Epitomee Medical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Value Capital and Epitomee Medical

The main advantage of trading using opposite Value Capital and Epitomee Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Capital 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 Value Capital One 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.