Correlation Between Propel Holdings and Brompton Lifeco
Can any of the company-specific risk be diversified away by investing in both Propel Holdings and Brompton Lifeco 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 Propel Holdings and Brompton Lifeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Propel Holdings and Brompton Lifeco Split, you can compare the effects of market volatilities on Propel Holdings and Brompton Lifeco 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 Propel Holdings with a short position of Brompton Lifeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Propel Holdings and Brompton Lifeco.
Diversification Opportunities for Propel Holdings and Brompton Lifeco
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Propel and Brompton is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Propel Holdings and Brompton Lifeco Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Lifeco Split and Propel Holdings 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 Propel Holdings are associated (or correlated) with Brompton Lifeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Lifeco Split has no effect on the direction of Propel Holdings i.e., Propel Holdings and Brompton Lifeco go up and down completely randomly.
Pair Corralation between Propel Holdings and Brompton Lifeco
Assuming the 90 days trading horizon Propel Holdings is expected to generate 1.49 times more return on investment than Brompton Lifeco. However, Propel Holdings is 1.49 times more volatile than Brompton Lifeco Split. It trades about 0.12 of its potential returns per unit of risk. Brompton Lifeco Split is currently generating about 0.12 per unit of risk. If you would invest 682.00 in Propel Holdings on September 12, 2024 and sell it today you would earn a total of 2,846 from holding Propel Holdings or generate 417.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Propel Holdings vs. Brompton Lifeco Split
Performance |
| Timeline |
| Propel Holdings |
| Brompton Lifeco Split |
Propel Holdings and Brompton Lifeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Propel Holdings and Brompton Lifeco
The main advantage of trading using opposite Propel Holdings and Brompton Lifeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Propel Holdings position performs unexpectedly, Brompton Lifeco 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 Brompton Lifeco will offset losses from the drop in Brompton Lifeco's long position.| Propel Holdings vs. Brompton Lifeco Split | Propel Holdings vs. North American Financial | Propel Holdings vs. Prime Dividend Corp | Propel Holdings vs. Financial 15 Split |
| Brompton Lifeco vs. Life Banc Split | Brompton Lifeco vs. Brompton Split Banc | Brompton Lifeco vs. Dividend Growth Split | Brompton Lifeco vs. Dividend 15 Split |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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