Correlation Between Enhabit and CryoCell International

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

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

Diversification Opportunities for Enhabit and CryoCell International

0.55

Correlation Coefficient

Enhabit  CryoCell International

Very weak diversification

The 3 months correlation between Enhabit and CryoCell is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Enhabit and CryoCell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoCell International and Enhabit 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 Enhabit are associated (or correlated) with CryoCell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoCell International has no effect on the direction of Enhabit i.e., Enhabit and CryoCell International go up and down completely randomly.

Pair Corralation between Enhabit and CryoCell International

Given the investment horizon of 90 days Enhabit is expected to under-perform the CryoCell International. But the stock apears to be less risky and, when comparing its historical volatility, Enhabit is 1.6 times less risky than CryoCell International. The stock trades about -0.19 of its potential returns per unit of risk. The CryoCell International is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  746.00  in CryoCell International on January 31, 2024 and sell it today you would earn a total of  93.00  from holding CryoCell International or generate 12.47% return on investment over 90 days.

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

Enhabit  vs.  CryoCell International

Enhabit

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enhabit are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Enhabit may actually be approaching a critical reversion point that can send shares even higher in May 2024.

CryoCell International

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CryoCell International are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, CryoCell International disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enhabit and CryoCell International

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

The idea behind Enhabit and CryoCell International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..