Correlation Between China Health and Bellatora
Can any of the company-specific risk be diversified away by investing in both China Health and Bellatora 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 China Health and Bellatora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Management and Bellatora, you can compare the effects of market volatilities on China Health and Bellatora 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 China Health with a short position of Bellatora. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Bellatora.
Diversification Opportunities for China Health and Bellatora
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Bellatora is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Bellatora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellatora and China Health 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 China Health Management are associated (or correlated) with Bellatora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellatora has no effect on the direction of China Health i.e., China Health and Bellatora go up and down completely randomly.
Pair Corralation between China Health and Bellatora
Given the investment horizon of 90 days China Health is expected to generate 3.63 times less return on investment than Bellatora. But when comparing it to its historical volatility, China Health Management is 9.24 times less risky than Bellatora. It trades about 0.21 of its potential returns per unit of risk. Bellatora is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Bellatora on August 25, 2024 and sell it today you would lose (3.00) from holding Bellatora or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Health Management vs. Bellatora
Performance |
| Timeline |
| China Health Management |
| Bellatora |
China Health and Bellatora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Bellatora
The main advantage of trading using opposite China Health and Bellatora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Bellatora 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 Bellatora will offset losses from the drop in Bellatora's long position.| China Health vs. Boxlight Corp Class | China Health vs. Siyata Mobile | China Health vs. ClearOne | China Health vs. HUMANA INC |
| Bellatora vs. Absolute Health and | Bellatora vs. China Health Management | Bellatora vs. Embrace Change Acquisition | Bellatora vs. TransAKT |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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