Correlation Between BRIT AMER and Healthcare Services
Can any of the company-specific risk be diversified away by investing in both BRIT AMER and Healthcare Services 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 BRIT AMER and Healthcare Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRIT AMER TOBACCO and Healthcare Services Group, you can compare the effects of market volatilities on BRIT AMER and Healthcare Services 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 BRIT AMER with a short position of Healthcare Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and Healthcare Services.
Diversification Opportunities for BRIT AMER and Healthcare Services
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BRIT and Healthcare is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and Healthcare Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Services and BRIT AMER 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 BRIT AMER TOBACCO are associated (or correlated) with Healthcare Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Services has no effect on the direction of BRIT AMER i.e., BRIT AMER and Healthcare Services go up and down completely randomly.
Pair Corralation between BRIT AMER and Healthcare Services
Assuming the 90 days trading horizon BRIT AMER TOBACCO is expected to generate 0.52 times more return on investment than Healthcare Services. However, BRIT AMER TOBACCO is 1.92 times less risky than Healthcare Services. It trades about 0.05 of its potential returns per unit of risk. Healthcare Services Group is currently generating about -0.01 per unit of risk. If you would invest 2,866 in BRIT AMER TOBACCO on November 27, 2024 and sell it today you would earn a total of 788.00 from holding BRIT AMER TOBACCO or generate 27.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. Healthcare Services Group
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| Healthcare Services |
BRIT AMER and Healthcare Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and Healthcare Services
The main advantage of trading using opposite BRIT AMER and Healthcare Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER position performs unexpectedly, Healthcare Services 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 Healthcare Services will offset losses from the drop in Healthcare Services' long position.| BRIT AMER vs. GBS Software AG | BRIT AMER vs. Gol Intelligent Airlines | BRIT AMER vs. Kingdee International Software | BRIT AMER vs. Easy Software AG |
| Healthcare Services vs. Tradegate AG Wertpapierhandelsbank | Healthcare Services vs. Tradeweb Markets | Healthcare Services vs. GOME Retail Holdings | Healthcare Services vs. SIDETRADE EO 1 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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