Correlation Between Bayer AG and Regional Health
Can any of the company-specific risk be diversified away by investing in both Bayer AG and Regional 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 Bayer AG and Regional Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer AG PK and Regional Health Properties, you can compare the effects of market volatilities on Bayer AG and Regional 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 Bayer AG with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer AG and Regional Health.
Diversification Opportunities for Bayer AG and Regional Health
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bayer and Regional is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG PK and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop and Bayer AG 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 Bayer AG PK are associated (or correlated) with Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Bayer AG i.e., Bayer AG and Regional Health go up and down completely randomly.
Pair Corralation between Bayer AG and Regional Health
If you would invest 36.00 in Regional Health Properties on September 12, 2024 and sell it today you would lose (1.00) from holding Regional Health Properties or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Bayer AG PK vs. Regional Health Properties
Performance |
| Timeline |
| Bayer AG PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Regional Health Prop |
Bayer AG and Regional Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer AG and Regional Health
The main advantage of trading using opposite Bayer AG and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer AG position performs unexpectedly, Regional 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 Regional Health will offset losses from the drop in Regional Health's long position.| Bayer AG vs. Novartis AG ADR | Bayer AG vs. Sanofi ADR | Bayer AG vs. AstraZeneca PLC ADR | Bayer AG vs. GlaxoSmithKline PLC ADR |
| Regional Health vs. Regional Health Properties | Regional Health vs. Sotherly Hotels Pref | Regional Health vs. Ashford Hospitality Trust | Regional Health vs. Pacific Gas and |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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