Correlation Between Nu Med and EGF Theramed

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

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

Diversification Opportunities for Nu Med and EGF Theramed

-0.51

Correlation Coefficient

Nu Med  EGF Theramed

Excellent diversification

The 3 months correlation between NUMD and EGF is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nu Med Plus and EGF Theramed Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGF Theramed Health and Nu Med 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 Nu Med Plus are associated (or correlated) with EGF Theramed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGF Theramed Health has no effect on the direction of Nu Med i.e., Nu Med and EGF Theramed go up and down completely randomly.

Pair Corralation between Nu Med and EGF Theramed

Given the investment horizon of 90 days Nu Med Plus is expected to generate 0.42 times more return on investment than EGF Theramed. However, Nu Med Plus is 2.39 times less risky than EGF Theramed. It trades about 0.04 of its potential returns per unit of risk. EGF Theramed Health is currently generating about 0.0 per unit of risk. If you would invest  4.50  in Nu Med Plus on May 4, 2025 and sell it today you would lose (0.06) from holding Nu Med Plus or give up 1.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Nu Med Plus  vs.  EGF Theramed Health

Nu Med Plus

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nu Med Plus are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Nu Med exhibited solid returns over the last few months and may actually be approaching a breakup point.

EGF Theramed Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days EGF Theramed Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, EGF Theramed is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nu Med and EGF Theramed

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

The idea behind Nu Med Plus and EGF Theramed Health 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.