Correlation Between BEBO Health and Mauna Kea
Can any of the company-specific risk be diversified away by investing in both BEBO Health and Mauna Kea 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 BEBO Health and Mauna Kea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEBO Health SA and Mauna Kea Technologies, you can compare the effects of market volatilities on BEBO Health and Mauna Kea 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 BEBO Health with a short position of Mauna Kea. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEBO Health and Mauna Kea.
Diversification Opportunities for BEBO Health and Mauna Kea
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BEBO and Mauna is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding BEBO Health SA and Mauna Kea Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mauna Kea Technologies and BEBO Health 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 BEBO Health SA are associated (or correlated) with Mauna Kea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mauna Kea Technologies has no effect on the direction of BEBO Health i.e., BEBO Health and Mauna Kea go up and down completely randomly.
Pair Corralation between BEBO Health and Mauna Kea
Assuming the 90 days trading horizon BEBO Health SA is expected to generate 0.63 times more return on investment than Mauna Kea. However, BEBO Health SA is 1.58 times less risky than Mauna Kea. It trades about -0.12 of its potential returns per unit of risk. Mauna Kea Technologies is currently generating about -0.15 per unit of risk. If you would invest 398.00 in BEBO Health SA on September 1, 2024 and sell it today you would lose (154.00) from holding BEBO Health SA or give up 38.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEBO Health SA vs. Mauna Kea Technologies
Performance |
| Timeline |
| BEBO Health SA |
| Mauna Kea Technologies |
BEBO Health and Mauna Kea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEBO Health and Mauna Kea
The main advantage of trading using opposite BEBO Health and Mauna Kea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEBO Health position performs unexpectedly, Mauna Kea 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 Mauna Kea will offset losses from the drop in Mauna Kea's long position.| BEBO Health vs. Jacquet Metal Service | BEBO Health vs. Affluent Medical SAS | BEBO Health vs. Fiducial Office Solutions | BEBO Health vs. Guandao Puer Investment |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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