Correlation Between Broadwind and Natural Health
Can any of the company-specific risk be diversified away by investing in both Broadwind and Natural 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 Broadwind and Natural Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadwind and Natural Health Trends, you can compare the effects of market volatilities on Broadwind and Natural 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 Broadwind with a short position of Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadwind and Natural Health.
Diversification Opportunities for Broadwind and Natural Health
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Broadwind and Natural is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends and Broadwind 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 Broadwind are associated (or correlated) with Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of Broadwind i.e., Broadwind and Natural Health go up and down completely randomly.
Pair Corralation between Broadwind and Natural Health
Assuming the 90 days trading horizon Broadwind is expected to under-perform the Natural Health. In addition to that, Broadwind is 1.7 times more volatile than Natural Health Trends. It trades about -0.02 of its total potential returns per unit of risk. Natural Health Trends is currently generating about 0.03 per unit of volatility. If you would invest 503.00 in Natural Health Trends on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Natural Health Trends or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadwind vs. Natural Health Trends
Performance |
| Timeline |
| Broadwind |
| Natural Health Trends |
Broadwind and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadwind and Natural Health
The main advantage of trading using opposite Broadwind and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind position performs unexpectedly, Natural 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 Natural Health will offset losses from the drop in Natural Health's long position.| Broadwind vs. SIEMENS AG SP | Broadwind vs. Siemens Aktiengesellschaft | Broadwind vs. Siemens Aktiengesellschaft | Broadwind vs. Schneider Electric SE |
| Natural Health vs. CITY OFFICE REIT | Natural Health vs. WillScot Mobile Mini | Natural Health vs. KIMBALL ELECTRONICS | Natural Health vs. ELECTRONIC ARTS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |