Correlation Between Ebix and Ember Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Ebix and Ember Therapeutics 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 Ebix and Ember Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebix Inc and Ember Therapeutics, you can compare the effects of market volatilities on Ebix and Ember Therapeutics 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 Ebix with a short position of Ember Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebix and Ember Therapeutics.

Diversification Opportunities for Ebix and Ember Therapeutics

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Ebix and Ember Therapeutics

Given the investment horizon of 90 days Ebix Inc is expected to under-perform the Ember Therapeutics. In addition to that, Ebix is 1.92 times more volatile than Ember Therapeutics. It trades about -0.03 of its total potential returns per unit of risk. Ember Therapeutics is currently generating about 0.02 per unit of volatility. If you would invest  0.01  in Ember Therapeutics on December 29, 2023 and sell it today you would earn a total of  0.00  from holding Ember Therapeutics or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.81%
ValuesDaily Returns

Ebix Inc  vs.  Ember Therapeutics

 Performance 
       Timeline  
Ebix Inc 

Risk-Adjusted Performance

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Over the last 90 days Ebix Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady forward indicators, Ebix showed solid returns over the last few months and may actually be approaching a breakup point.
Ember Therapeutics 

Risk-Adjusted Performance

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Over the last 90 days Ember Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Ember Therapeutics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ebix and Ember Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ebix and Ember Therapeutics

The main advantage of trading using opposite Ebix and Ember Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebix position performs unexpectedly, Ember Therapeutics 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 Ember Therapeutics will offset losses from the drop in Ember Therapeutics' long position.
The idea behind Ebix Inc and Ember Therapeutics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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