Correlation Between Optima Health and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Optima Health and Beeks Trading 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 Optima Health and Beeks Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Beeks Trading, you can compare the effects of market volatilities on Optima Health and Beeks Trading 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 Optima Health with a short position of Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Beeks Trading.
Diversification Opportunities for Optima Health and Beeks Trading
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Optima and Beeks is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading and Optima 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 Optima Health plc are associated (or correlated) with Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Optima Health i.e., Optima Health and Beeks Trading go up and down completely randomly.
Pair Corralation between Optima Health and Beeks Trading
Assuming the 90 days trading horizon Optima Health plc is expected to under-perform the Beeks Trading. But the stock apears to be less risky and, when comparing its historical volatility, Optima Health plc is 2.94 times less risky than Beeks Trading. The stock trades about -0.32 of its potential returns per unit of risk. The Beeks Trading is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 27,200 in Beeks Trading on October 21, 2024 and sell it today you would earn a total of 400.00 from holding Beeks Trading or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Health plc vs. Beeks Trading
Performance |
| Timeline |
| Optima Health plc |
| Beeks Trading |
Optima Health and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Beeks Trading
The main advantage of trading using opposite Optima Health and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Optima Health vs. Monks Investment Trust | Optima Health vs. Schroders Investment Trusts | Optima Health vs. Canadian General Investments | Optima Health vs. Advanced Medical Solutions |
| Beeks Trading vs. SBM Offshore NV | Beeks Trading vs. Optima Health plc | Beeks Trading vs. HCA Healthcare | Beeks Trading vs. Naturhouse Health SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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