Correlation Between America Great and Epizyme

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

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

Diversification Opportunities for America Great and Epizyme

-0.85

Correlation Coefficient

America Great  Epizyme

Pay attention - limited upside

The 3 months correlation between America and Epizyme is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding America Great Health and Epizyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epizyme and America Great 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 America Great Health are associated (or correlated) with Epizyme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epizyme has no effect on the direction of America Great i.e., America Great and Epizyme go up and down completely randomly.

Pair Corralation between America Great and Epizyme

If you would invest  147.00  in Epizyme on January 31, 2024 and sell it today you would earn a total of  0.00  from holding Epizyme or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

America Great Health  vs.  Epizyme

America Great Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days America Great Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Epizyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Epizyme has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Epizyme is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with America Great and Epizyme

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

The idea behind America Great Health and Epizyme 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.