Correlation Between Bellevue Healthcare and Indutrade
Can any of the company-specific risk be diversified away by investing in both Bellevue Healthcare and Indutrade 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 Bellevue Healthcare and Indutrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bellevue Healthcare Trust and Indutrade AB, you can compare the effects of market volatilities on Bellevue Healthcare and Indutrade 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 Bellevue Healthcare with a short position of Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellevue Healthcare and Indutrade.
Diversification Opportunities for Bellevue Healthcare and Indutrade
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bellevue and Indutrade is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Healthcare Trust and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and Bellevue Healthcare 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 Bellevue Healthcare Trust are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Bellevue Healthcare i.e., Bellevue Healthcare and Indutrade go up and down completely randomly.
Pair Corralation between Bellevue Healthcare and Indutrade
Assuming the 90 days trading horizon Bellevue Healthcare is expected to generate 2.83 times less return on investment than Indutrade. But when comparing it to its historical volatility, Bellevue Healthcare Trust is 1.64 times less risky than Indutrade. It trades about 0.16 of its potential returns per unit of risk. Indutrade AB is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 27,690 in Indutrade AB on October 29, 2024 and sell it today you would earn a total of 2,520 from holding Indutrade AB or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bellevue Healthcare Trust vs. Indutrade AB
Performance |
| Timeline |
| Bellevue Healthcare Trust |
| Indutrade AB |
Bellevue Healthcare and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellevue Healthcare and Indutrade
The main advantage of trading using opposite Bellevue Healthcare and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellevue Healthcare position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade's long position.| Bellevue Healthcare vs. Worldwide Healthcare Trust | Bellevue Healthcare vs. Fortune Brands Home | Bellevue Healthcare vs. Universal Health Services | Bellevue Healthcare vs. Induction Healthcare Group |
| Indutrade vs. Berkshire Hathaway | Indutrade vs. Samsung Electronics Co | Indutrade vs. Samsung Electronics Co | Indutrade vs. Chocoladefabriken Lindt Spruengli |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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