Correlation Between MEITUAN UNSPADR2B and Brookdale Senior
Can any of the company-specific risk be diversified away by investing in both MEITUAN UNSPADR2B 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 MEITUAN UNSPADR2B and Brookdale Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEITUAN UNSPADR2B and Brookdale Senior Living, you can compare the effects of market volatilities on MEITUAN UNSPADR2B 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 MEITUAN UNSPADR2B with a short position of Brookdale Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITUAN UNSPADR2B and Brookdale Senior.
Diversification Opportunities for MEITUAN UNSPADR2B and Brookdale Senior
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MEITUAN and Brookdale is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding MEITUAN UNSPADR2B 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 MEITUAN UNSPADR2B 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 MEITUAN UNSPADR2B 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 MEITUAN UNSPADR2B i.e., MEITUAN UNSPADR2B and Brookdale Senior go up and down completely randomly.
Pair Corralation between MEITUAN UNSPADR2B and Brookdale Senior
Assuming the 90 days trading horizon MEITUAN UNSPADR2B is expected to generate 1.73 times more return on investment than Brookdale Senior. However, MEITUAN UNSPADR2B is 1.73 times more volatile than Brookdale Senior Living. It trades about 0.06 of its potential returns per unit of risk. Brookdale Senior Living is currently generating about -0.06 per unit of risk. If you would invest 3,880 in MEITUAN UNSPADR2B on August 30, 2024 and sell it today you would earn a total of 300.00 from holding MEITUAN UNSPADR2B or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
MEITUAN UNSPADR2B vs. Brookdale Senior Living
Performance |
| Timeline |
| MEITUAN UNSPADR2B |
| Brookdale Senior Living |
MEITUAN UNSPADR2B and Brookdale Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITUAN UNSPADR2B and Brookdale Senior
The main advantage of trading using opposite MEITUAN UNSPADR2B and Brookdale Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITUAN UNSPADR2B 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.| MEITUAN UNSPADR2B vs. Amazon Inc | MEITUAN UNSPADR2B vs. Amazon Inc | MEITUAN UNSPADR2B vs. Alibaba Group Holdings | MEITUAN UNSPADR2B vs. JD Inc Adr |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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