Correlation Between Univec and Ethema Health

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

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

Diversification Opportunities for Univec and Ethema Health

-0.12

Correlation Coefficient

Univec  Ethema Health

Good diversification

The 3 months correlation between Univec and Ethema is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Univec Inc and Ethema Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethema Health Corp and Univec 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 Univec Inc are associated (or correlated) with Ethema Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethema Health Corp has no effect on the direction of Univec i.e., Univec and Ethema Health go up and down completely randomly.

Pair Corralation between Univec and Ethema Health

Given the investment horizon of 90 days Univec is expected to generate 3.13 times less return on investment than Ethema Health. But when comparing it to its historical volatility, Univec Inc is 1.54 times less risky than Ethema Health. It trades about 0.05 of its potential returns per unit of risk. Ethema Health Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Ethema Health Corp on May 2, 2025 and sell it today you would earn a total of  0.01  from holding Ethema Health Corp or generate 33.33% return on investment over 90 days.

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

Univec Inc  vs.  Ethema Health Corp

Univec Inc

Risk-Adjusted Performance

Insignificant

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

Ethema Health Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethema Health Corp are ranked lower than 7 (%) 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.

Pair Trading with Univec and Ethema Health

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

The idea behind Univec Inc and Ethema Health Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.