Correlation Between Beauty Health and Life Insurance
Can any of the company-specific risk be diversified away by investing in both Beauty Health and Life Insurance 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 Beauty Health and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beauty Health Co and Life Insurance, you can compare the effects of market volatilities on Beauty Health and Life Insurance 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 Beauty Health with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beauty Health and Life Insurance.
Diversification Opportunities for Beauty Health and Life Insurance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beauty and Life is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Beauty Health Co and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Beauty 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 Beauty Health Co are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of Beauty Health i.e., Beauty Health and Life Insurance go up and down completely randomly.
Pair Corralation between Beauty Health and Life Insurance
Given the investment horizon of 90 days Beauty Health Co is expected to under-perform the Life Insurance. In addition to that, Beauty Health is 2.56 times more volatile than Life Insurance. It trades about -0.03 of its total potential returns per unit of risk. Life Insurance is currently generating about -0.07 per unit of volatility. If you would invest 3,000 in Life Insurance on October 27, 2024 and sell it today you would lose (1,450) from holding Life Insurance or give up 48.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.17% |
| Values | Daily Returns |
Beauty Health Co vs. Life Insurance
Performance |
| Timeline |
| Beauty Health |
| Life Insurance |
Beauty Health and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beauty Health and Life Insurance
The main advantage of trading using opposite Beauty Health and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beauty Health position performs unexpectedly, Life Insurance 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| Beauty Health vs. Clear Secure | Beauty Health vs. GXO Logistics | Beauty Health vs. Doximity | Beauty Health vs. Figs Inc |
| Life Insurance vs. Brandywine Realty Trust | Life Insurance vs. Naked Wines plc | Life Insurance vs. SNDL Inc | Life Insurance vs. Oasis Hotel Resort |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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