Correlation Between Brompton European and NeuPath Health
Can any of the company-specific risk be diversified away by investing in both Brompton European and NeuPath Health 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 Brompton European and NeuPath Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton European Dividend and NeuPath Health, you can compare the effects of market volatilities on Brompton European and NeuPath Health 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 Brompton European with a short position of NeuPath Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton European and NeuPath Health.
Diversification Opportunities for Brompton European and NeuPath Health
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brompton and NeuPath is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Brompton European Dividend and NeuPath Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeuPath Health and Brompton European 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 Brompton European Dividend are associated (or correlated) with NeuPath Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeuPath Health has no effect on the direction of Brompton European i.e., Brompton European and NeuPath Health go up and down completely randomly.
Pair Corralation between Brompton European and NeuPath Health
Assuming the 90 days trading horizon Brompton European Dividend is expected to under-perform the NeuPath Health. But the etf apears to be less risky and, when comparing its historical volatility, Brompton European Dividend is 2.24 times less risky than NeuPath Health. The etf trades about -0.02 of its potential returns per unit of risk. The NeuPath Health is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16.00 in NeuPath Health on August 31, 2024 and sell it today you would earn a total of 1.00 from holding NeuPath Health or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton European Dividend vs. NeuPath Health
Performance |
| Timeline |
| Brompton European |
| NeuPath Health |
Brompton European and NeuPath Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton European and NeuPath Health
The main advantage of trading using opposite Brompton European and NeuPath Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton European position performs unexpectedly, NeuPath Health 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 NeuPath Health will offset losses from the drop in NeuPath Health's long position.| Brompton European vs. Brompton Global Dividend | Brompton European vs. Global Healthcare Income | Brompton European vs. Tech Leaders Income | Brompton European vs. Brompton North American |
| NeuPath Health vs. iShares Canadian HYBrid | NeuPath Health vs. Brompton European Dividend | NeuPath Health vs. Solar Alliance Energy | NeuPath Health vs. PHN Multi Style All Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |