Correlation Between Bombril SA and Healthpeak Properties
Can any of the company-specific risk be diversified away by investing in both Bombril SA and Healthpeak Properties 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 Bombril SA and Healthpeak Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bombril SA and Healthpeak Properties, you can compare the effects of market volatilities on Bombril SA and Healthpeak Properties 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 Bombril SA with a short position of Healthpeak Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bombril SA and Healthpeak Properties.
Diversification Opportunities for Bombril SA and Healthpeak Properties
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bombril and Healthpeak is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bombril SA and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and Bombril SA 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 Bombril SA are associated (or correlated) with Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of Bombril SA i.e., Bombril SA and Healthpeak Properties go up and down completely randomly.
Pair Corralation between Bombril SA and Healthpeak Properties
Assuming the 90 days trading horizon Bombril SA is expected to generate 3.26 times less return on investment than Healthpeak Properties. In addition to that, Bombril SA is 1.55 times more volatile than Healthpeak Properties. It trades about 0.04 of its total potential returns per unit of risk. Healthpeak Properties is currently generating about 0.19 per unit of volatility. If you would invest 9,339 in Healthpeak Properties on August 30, 2024 and sell it today you would earn a total of 3,973 from holding Healthpeak Properties or generate 42.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bombril SA vs. Healthpeak Properties
Performance |
| Timeline |
| Bombril SA |
| Healthpeak Properties |
Bombril SA and Healthpeak Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bombril SA and Healthpeak Properties
The main advantage of trading using opposite Bombril SA and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bombril SA position performs unexpectedly, Healthpeak Properties 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 Healthpeak Properties will offset losses from the drop in Healthpeak Properties' long position.| Bombril SA vs. Eternit SA | Bombril SA vs. Lupatech SA | Bombril SA vs. Inepar SA Indstria | Bombril SA vs. Marcopolo SA |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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