Correlation Between Brompton Lifeco and American Hotel
Can any of the company-specific risk be diversified away by investing in both Brompton Lifeco and American Hotel 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 Lifeco and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Lifeco Split and American Hotel Income, you can compare the effects of market volatilities on Brompton Lifeco and American Hotel 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 Lifeco with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Lifeco and American Hotel.
Diversification Opportunities for Brompton Lifeco and American Hotel
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brompton and American is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Lifeco Split and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Brompton Lifeco 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 Lifeco Split are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Brompton Lifeco i.e., Brompton Lifeco and American Hotel go up and down completely randomly.
Pair Corralation between Brompton Lifeco and American Hotel
Assuming the 90 days trading horizon Brompton Lifeco Split is expected to generate 0.39 times more return on investment than American Hotel. However, Brompton Lifeco Split is 2.58 times less risky than American Hotel. It trades about 0.1 of its potential returns per unit of risk. American Hotel Income is currently generating about -0.02 per unit of risk. If you would invest 316.00 in Brompton Lifeco Split on December 6, 2024 and sell it today you would earn a total of 453.00 from holding Brompton Lifeco Split or generate 143.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 83.23% |
| Values | Daily Returns |
Brompton Lifeco Split vs. American Hotel Income
Performance |
| Timeline |
| Brompton Lifeco Split |
| American Hotel Income |
Brompton Lifeco and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Lifeco and American Hotel
The main advantage of trading using opposite Brompton Lifeco and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Lifeco position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Brompton Lifeco vs. Life Banc Split | Brompton Lifeco vs. Brompton Split Banc | Brompton Lifeco vs. Dividend Growth Split | Brompton Lifeco vs. Dividend 15 Split |
| American Hotel vs. Chemtrade Logistics Income | American Hotel vs. Metalero Mining Corp | American Hotel vs. VIP Entertainment Technologies | American Hotel vs. Nicola Mining |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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