Correlation Between Bellevue Healthcare and Addtech
Can any of the company-specific risk be diversified away by investing in both Bellevue Healthcare and Addtech 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 Addtech 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 Addtech, you can compare the effects of market volatilities on Bellevue Healthcare and Addtech 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 Addtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellevue Healthcare and Addtech.
Diversification Opportunities for Bellevue Healthcare and Addtech
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bellevue and Addtech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Healthcare Trust and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of Bellevue Healthcare i.e., Bellevue Healthcare and Addtech go up and down completely randomly.
Pair Corralation between Bellevue Healthcare and Addtech
Assuming the 90 days trading horizon Bellevue Healthcare Trust is expected to under-perform the Addtech. But the stock apears to be less risky and, when comparing its historical volatility, Bellevue Healthcare Trust is 1.38 times less risky than Addtech. The stock trades about -0.02 of its potential returns per unit of risk. The Addtech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 29,490 in Addtech on September 1, 2024 and sell it today you would earn a total of 630.00 from holding Addtech or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bellevue Healthcare Trust vs. Addtech
Performance |
| Timeline |
| Bellevue Healthcare Trust |
| Addtech |
Bellevue Healthcare and Addtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellevue Healthcare and Addtech
The main advantage of trading using opposite Bellevue Healthcare and Addtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellevue Healthcare position performs unexpectedly, Addtech 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 Addtech will offset losses from the drop in Addtech's long position.| Bellevue Healthcare vs. Bytes Technology | Bellevue Healthcare vs. Take Two Interactive Software | Bellevue Healthcare vs. JB Hunt Transport | Bellevue Healthcare vs. Solstad Offshore ASA |
| Addtech vs. Bellevue Healthcare Trust | Addtech vs. Lendinvest PLC | Addtech vs. Omega Healthcare Investors | Addtech vs. CVS Health Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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