Correlation Between Hologic and Bodycote PLC
Can any of the company-specific risk be diversified away by investing in both Hologic and Bodycote PLC 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 Hologic and Bodycote PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hologic and Bodycote PLC, you can compare the effects of market volatilities on Hologic and Bodycote PLC 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 Hologic with a short position of Bodycote PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hologic and Bodycote PLC.
Diversification Opportunities for Hologic and Bodycote PLC
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hologic and Bodycote is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hologic and Bodycote PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bodycote PLC and Hologic 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 Hologic are associated (or correlated) with Bodycote PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bodycote PLC has no effect on the direction of Hologic i.e., Hologic and Bodycote PLC go up and down completely randomly.
Pair Corralation between Hologic and Bodycote PLC
Assuming the 90 days horizon Hologic is expected to under-perform the Bodycote PLC. But the stock apears to be less risky and, when comparing its historical volatility, Hologic is 2.73 times less risky than Bodycote PLC. The stock trades about -0.21 of its potential returns per unit of risk. The Bodycote PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Bodycote PLC on September 13, 2024 and sell it today you would earn a total of 115.00 from holding Bodycote PLC or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hologic vs. Bodycote PLC
Performance |
| Timeline |
| Hologic |
| Bodycote PLC |
Hologic and Bodycote PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hologic and Bodycote PLC
The main advantage of trading using opposite Hologic and Bodycote PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hologic position performs unexpectedly, Bodycote PLC 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 Bodycote PLC will offset losses from the drop in Bodycote PLC's long position.| Hologic vs. Superior Plus Corp | Hologic vs. NMI Holdings | Hologic vs. SIVERS SEMICONDUCTORS AB | Hologic vs. NorAm Drilling AS |
| Bodycote PLC vs. CHIBA BANK | Bodycote PLC vs. VIRG NATL BANKSH | Bodycote PLC vs. GRIFFIN MINING LTD | Bodycote PLC vs. Regions Financial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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