Correlation Between Bloom Select and Global Healthcare
Can any of the company-specific risk be diversified away by investing in both Bloom Select and Global Healthcare 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 Bloom Select and Global Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloom Select Income and Global Healthcare Income, you can compare the effects of market volatilities on Bloom Select and Global Healthcare 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 Bloom Select with a short position of Global Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Select and Global Healthcare.
Diversification Opportunities for Bloom Select and Global Healthcare
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bloom and Global is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Select Income and Global Healthcare Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Healthcare Income and Bloom Select 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 Bloom Select Income are associated (or correlated) with Global Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Healthcare Income has no effect on the direction of Bloom Select i.e., Bloom Select and Global Healthcare go up and down completely randomly.
Pair Corralation between Bloom Select and Global Healthcare
Assuming the 90 days trading horizon Bloom Select Income is expected to under-perform the Global Healthcare. In addition to that, Bloom Select is 2.44 times more volatile than Global Healthcare Income. It trades about -0.11 of its total potential returns per unit of risk. Global Healthcare Income is currently generating about -0.05 per unit of volatility. If you would invest 827.00 in Global Healthcare Income on August 29, 2024 and sell it today you would lose (8.00) from holding Global Healthcare Income or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Bloom Select Income vs. Global Healthcare Income
Performance |
| Timeline |
| Bloom Select Income |
| Global Healthcare Income |
Bloom Select and Global Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloom Select and Global Healthcare
The main advantage of trading using opposite Bloom Select and Global Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Select position performs unexpectedly, Global Healthcare 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 Global Healthcare will offset losses from the drop in Global Healthcare's long position.| Bloom Select vs. Canadian High Income | Bloom Select vs. Blue Ribbon Income | Bloom Select vs. Energy Income | Bloom Select vs. Australian REIT Income |
| Global Healthcare vs. Blue Ribbon Income | Global Healthcare vs. MINT Income Fund | Global Healthcare vs. Energy Income | Global Healthcare vs. Canadian High Income |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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