Correlation Between Ethema Health and Univec

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

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

Diversification Opportunities for Ethema Health and Univec

0.01

Correlation Coefficient

Ethema Health  Univec

Significant diversification

The 3 months correlation between Ethema and Univec is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ethema Health Corp and Univec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univec Inc and Ethema Health 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 Ethema Health Corp are associated (or correlated) with Univec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univec Inc has no effect on the direction of Ethema Health i.e., Ethema Health and Univec go up and down completely randomly.

Pair Corralation between Ethema Health and Univec

Given the investment horizon of 90 days Ethema Health Corp is expected to generate 1.17 times more return on investment than Univec. However, Ethema Health is 1.17 times more volatile than Univec Inc. It trades about 0.03 of its potential returns per unit of risk. Univec Inc is currently generating about 0.03 per unit of risk. If you would invest  0.08  in Ethema Health Corp on April 22, 2025 and sell it today you would lose (0.05) from holding Ethema Health Corp or give up 62.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Ethema Health Corp  vs.  Univec Inc

Ethema Health Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ethema Health Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Ethema Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Univec Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Univec Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Univec is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ethema Health and Univec

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

The idea behind Ethema Health Corp and Univec Inc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.