Correlation Between BROOKDALE and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both BROOKDALE and GEELY AUTOMOBILE 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 BROOKDALE and GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROOKDALE SR LIVING and GEELY AUTOMOBILE, you can compare the effects of market volatilities on BROOKDALE and GEELY AUTOMOBILE 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 BROOKDALE with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROOKDALE and GEELY AUTOMOBILE.
Diversification Opportunities for BROOKDALE and GEELY AUTOMOBILE
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BROOKDALE and GEELY is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BROOKDALE SR LIVING and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and BROOKDALE 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 BROOKDALE SR LIVING are associated (or correlated) with GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of BROOKDALE i.e., BROOKDALE and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between BROOKDALE and GEELY AUTOMOBILE
Assuming the 90 days trading horizon BROOKDALE SR LIVING is expected to generate 1.37 times more return on investment than GEELY AUTOMOBILE. However, BROOKDALE is 1.37 times more volatile than GEELY AUTOMOBILE. It trades about 0.06 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.06 per unit of risk. If you would invest 228.00 in BROOKDALE SR LIVING on October 9, 2024 and sell it today you would earn a total of 258.00 from holding BROOKDALE SR LIVING or generate 113.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROOKDALE SR LIVING vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| BROOKDALE SR LIVING |
| GEELY AUTOMOBILE |
BROOKDALE and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROOKDALE and GEELY AUTOMOBILE
The main advantage of trading using opposite BROOKDALE and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROOKDALE position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| BROOKDALE vs. Jacquet Metal Service | BROOKDALE vs. Minerals Technologies | BROOKDALE vs. SOFI TECHNOLOGIES | BROOKDALE vs. SIERRA METALS |
| GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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