Correlation Between Freedom Bank and Global Healthcare
Can any of the company-specific risk be diversified away by investing in both Freedom Bank and Global Healthcare 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 Freedom Bank and Global Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Bank of and Global Healthcare REIT, you can compare the effects of market volatilities on Freedom Bank and Global Healthcare 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 Freedom Bank with a short position of Global Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Global Healthcare.
Diversification Opportunities for Freedom Bank and Global Healthcare
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freedom and Global is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Global Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Healthcare REIT and Freedom Bank 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 Freedom Bank of are associated (or correlated) with Global Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Healthcare REIT has no effect on the direction of Freedom Bank i.e., Freedom Bank and Global Healthcare go up and down completely randomly.
Pair Corralation between Freedom Bank and Global Healthcare
Given the investment horizon of 90 days Freedom Bank is expected to generate 6.62 times less return on investment than Global Healthcare. But when comparing it to its historical volatility, Freedom Bank of is 12.49 times less risky than Global Healthcare. It trades about 0.03 of its potential returns per unit of risk. Global Healthcare REIT is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 178.00 in Global Healthcare REIT on August 28, 2024 and sell it today you would lose (8.00) from holding Global Healthcare REIT or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Freedom Bank of vs. Global Healthcare REIT
Performance |
| Timeline |
| Freedom Bank |
| Global Healthcare REIT |
Freedom Bank and Global Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Global Healthcare
The main advantage of trading using opposite Freedom Bank and Global Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Global Healthcare 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 Global Healthcare will offset losses from the drop in Global Healthcare's long position.| Freedom Bank vs. Washington Business Bank | Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp |
| Global Healthcare vs. Smart REIT | Global Healthcare vs. Phillips Edison Co | Global Healthcare vs. Simon Property Group | Global Healthcare vs. Inventrust Properties Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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