Correlation Between JD HEALTH and Brookdale Senior
Can any of the company-specific risk be diversified away by investing in both JD HEALTH and Brookdale Senior 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 JD HEALTH and Brookdale Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD HEALTH INTL and Brookdale Senior Living, you can compare the effects of market volatilities on JD HEALTH and Brookdale Senior 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 JD HEALTH with a short position of Brookdale Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD HEALTH and Brookdale Senior.
Diversification Opportunities for JD HEALTH and Brookdale Senior
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 8ZN and Brookdale is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JD HEALTH INTL and Brookdale Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookdale Senior Living and JD 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 JD HEALTH INTL are associated (or correlated) with Brookdale Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookdale Senior Living has no effect on the direction of JD HEALTH i.e., JD HEALTH and Brookdale Senior go up and down completely randomly.
Pair Corralation between JD HEALTH and Brookdale Senior
Assuming the 90 days horizon JD HEALTH INTL is expected to under-perform the Brookdale Senior. In addition to that, JD HEALTH is 1.39 times more volatile than Brookdale Senior Living. It trades about -0.01 of its total potential returns per unit of risk. Brookdale Senior Living is currently generating about 0.02 per unit of volatility. If you would invest 476.00 in Brookdale Senior Living on August 26, 2024 and sell it today you would earn a total of 24.00 from holding Brookdale Senior Living or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD HEALTH INTL vs. Brookdale Senior Living
Performance |
| Timeline |
| JD HEALTH INTL |
| Brookdale Senior Living |
JD HEALTH and Brookdale Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD HEALTH and Brookdale Senior
The main advantage of trading using opposite JD HEALTH and Brookdale Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD HEALTH position performs unexpectedly, Brookdale Senior 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 Brookdale Senior will offset losses from the drop in Brookdale Senior's long position.| JD HEALTH vs. Option Care Health | JD HEALTH vs. HYGEIA HC HLDGS | JD HEALTH vs. Superior Plus Corp | JD HEALTH vs. Origin Agritech |
| Brookdale Senior vs. Option Care Health | Brookdale Senior vs. HYGEIA HC HLDGS | Brookdale Senior vs. Superior Plus Corp | Brookdale Senior vs. Origin Agritech |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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