Correlation Between Optima Health and Brunner Investment
Can any of the company-specific risk be diversified away by investing in both Optima Health and Brunner Investment 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 Brunner Investment 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 Brunner Investment Trust, you can compare the effects of market volatilities on Optima Health and Brunner Investment 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 Brunner Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Brunner Investment.
Diversification Opportunities for Optima Health and Brunner Investment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Optima and Brunner is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Brunner Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunner Investment Trust 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 Brunner Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunner Investment Trust has no effect on the direction of Optima Health i.e., Optima Health and Brunner Investment go up and down completely randomly.
Pair Corralation between Optima Health and Brunner Investment
Assuming the 90 days trading horizon Optima Health plc is expected to under-perform the Brunner Investment. In addition to that, Optima Health is 1.12 times more volatile than Brunner Investment Trust. It trades about -0.04 of its total potential returns per unit of risk. Brunner Investment Trust is currently generating about 0.07 per unit of volatility. If you would invest 99,024 in Brunner Investment Trust on October 22, 2024 and sell it today you would earn a total of 42,476 from holding Brunner Investment Trust or generate 42.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 16.27% |
| Values | Daily Returns |
Optima Health plc vs. Brunner Investment Trust
Performance |
| Timeline |
| Optima Health plc |
| Brunner Investment Trust |
Optima Health and Brunner Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Brunner Investment
The main advantage of trading using opposite Optima Health and Brunner Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Brunner Investment 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 Brunner Investment will offset losses from the drop in Brunner Investment's long position.| Optima Health vs. Adriatic Metals | Optima Health vs. Compagnie Plastic Omnium | Optima Health vs. Alien Metals | Optima Health vs. Power Metal Resources |
| Brunner Investment vs. BlackRock Frontiers Investment | Brunner Investment vs. EJF Investments | Brunner Investment vs. JD Sports Fashion | Brunner Investment vs. Vietnam Enterprise Investments |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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