Correlation Between Brookdale Senior and CryoCell International
Can any of the company-specific risk be diversified away by investing in both Brookdale Senior and CryoCell International 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 Senior and CryoCell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookdale Senior Living and CryoCell International, you can compare the effects of market volatilities on Brookdale Senior and CryoCell International 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 Senior with a short position of CryoCell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookdale Senior and CryoCell International.
Diversification Opportunities for Brookdale Senior and CryoCell International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookdale and CryoCell is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Brookdale Senior Living and CryoCell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoCell International and Brookdale Senior 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 Senior Living are associated (or correlated) with CryoCell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoCell International has no effect on the direction of Brookdale Senior i.e., Brookdale Senior and CryoCell International go up and down completely randomly.
Pair Corralation between Brookdale Senior and CryoCell International
Considering the 90-day investment horizon Brookdale Senior Living is expected to under-perform the CryoCell International. But the stock apears to be less risky and, when comparing its historical volatility, Brookdale Senior Living is 1.32 times less risky than CryoCell International. The stock trades about -0.2 of its potential returns per unit of risk. The CryoCell International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 738.00 in CryoCell International on November 3, 2024 and sell it today you would earn a total of 41.00 from holding CryoCell International or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookdale Senior Living vs. CryoCell International
Performance |
| Timeline |
| Brookdale Senior Living |
| CryoCell International |
Brookdale Senior and CryoCell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookdale Senior and CryoCell International
The main advantage of trading using opposite Brookdale Senior and CryoCell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookdale Senior position performs unexpectedly, CryoCell International 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 CryoCell International will offset losses from the drop in CryoCell International's long position.| Brookdale Senior vs. The Ensign Group | Brookdale Senior vs. Community Health Systems | Brookdale Senior vs. National HealthCare | Brookdale Senior vs. Mednax Inc |
| CryoCell International vs. National HealthCare | CryoCell International vs. InnovAge Holding Corp | CryoCell International vs. Pennant Group | CryoCell International vs. Encompass 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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