Correlation Between Fortress Biotech and Regional Health
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and Regional 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 Fortress Biotech and Regional Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech Pref and Regional Health Properties, you can compare the effects of market volatilities on Fortress Biotech and Regional 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 Fortress Biotech with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and Regional Health.
Diversification Opportunities for Fortress Biotech and Regional Health
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortress and Regional is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop and Fortress Biotech 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 Fortress Biotech Pref are associated (or correlated) with Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Regional Health go up and down completely randomly.
Pair Corralation between Fortress Biotech and Regional Health
Assuming the 90 days horizon Fortress Biotech is expected to generate 2.08 times less return on investment than Regional Health. But when comparing it to its historical volatility, Fortress Biotech Pref is 3.98 times less risky than Regional Health. It trades about 0.11 of its potential returns per unit of risk. Regional Health Properties is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Regional Health Properties on September 12, 2024 and sell it today you would lose (1.00) from holding Regional Health Properties or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Biotech Pref vs. Regional Health Properties
Performance |
| Timeline |
| Fortress Biotech Pref |
| Regional Health Prop |
Fortress Biotech and Regional Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Biotech and Regional Health
The main advantage of trading using opposite Fortress Biotech and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, Regional 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 Regional Health will offset losses from the drop in Regional Health's long position.| Fortress Biotech vs. Checkpoint Therapeutics | Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Reviva Pharmaceuticals Holdings | Fortress Biotech vs. Kodiak Sciences |
| Regional Health vs. Regional Health Properties | Regional Health vs. Sotherly Hotels Pref | Regional Health vs. Ashford Hospitality Trust | Regional Health vs. Pacific Gas and |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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