Correlation Between CryoCell International and Enhabit

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

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

Diversification Opportunities for CryoCell International and Enhabit

-0.01

Correlation Coefficient

CryoCell International  Enhabit

Good diversification

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

Pair Corralation between CryoCell International and Enhabit

Given the investment horizon of 90 days CryoCell International is expected to generate 1.22 times more return on investment than Enhabit. However, CryoCell International is 1.22 times more volatile than Enhabit. It trades about 0.05 of its potential returns per unit of risk. Enhabit is currently generating about -0.01 per unit of risk. If you would invest  525.00  in CryoCell International on January 30, 2024 and sell it today you would earn a total of  330.00  from holding CryoCell International or generate 62.86% return on investment over 90 days.

Time Period	1 Month [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CryoCell International  vs.  Enhabit

CryoCell International

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CryoCell International are ranked lower than 14 (%) 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.

Enhabit

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Enhabit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CryoCell International and Enhabit

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

The idea behind CryoCell International and Enhabit 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.