Correlation Between Babylon Holdings and Nouveau Life
Can any of the company-specific risk be diversified away by investing in both Babylon Holdings and Nouveau Life 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 Babylon Holdings and Nouveau Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Babylon Holdings and Nouveau Life Pharmaceuticals, you can compare the effects of market volatilities on Babylon Holdings and Nouveau Life 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 Babylon Holdings with a short position of Nouveau Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Babylon Holdings and Nouveau Life.
Diversification Opportunities for Babylon Holdings and Nouveau Life
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Babylon and Nouveau is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Babylon Holdings and Nouveau Life Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Life Pharmac and Babylon Holdings 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 Babylon Holdings are associated (or correlated) with Nouveau Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Life Pharmac has no effect on the direction of Babylon Holdings i.e., Babylon Holdings and Nouveau Life go up and down completely randomly.
Pair Corralation between Babylon Holdings and Nouveau Life
If you would invest 0.02 in Nouveau Life Pharmaceuticals on August 25, 2024 and sell it today you would lose (0.01) from holding Nouveau Life Pharmaceuticals or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Babylon Holdings vs. Nouveau Life Pharmaceuticals
Performance |
| Timeline |
| Babylon Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nouveau Life Pharmac |
Babylon Holdings and Nouveau Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Babylon Holdings and Nouveau Life
The main advantage of trading using opposite Babylon Holdings and Nouveau Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Babylon Holdings position performs unexpectedly, Nouveau Life 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 Nouveau Life will offset losses from the drop in Nouveau Life's long position.| Babylon Holdings vs. FOXO Technologies | Babylon Holdings vs. Heartbeam | Babylon Holdings vs. EUDA Health Holdings | Babylon Holdings vs. Nutex Health |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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