Correlation Between Beauty Health and Seaport Entertainment
Can any of the company-specific risk be diversified away by investing in both Beauty Health and Seaport Entertainment 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 Seaport Entertainment 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 Seaport Entertainment Group, you can compare the effects of market volatilities on Beauty Health and Seaport Entertainment 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 Seaport Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beauty Health and Seaport Entertainment.
Diversification Opportunities for Beauty Health and Seaport Entertainment
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beauty and Seaport is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Beauty Health Co and Seaport Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaport Entertainment 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 Seaport Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaport Entertainment has no effect on the direction of Beauty Health i.e., Beauty Health and Seaport Entertainment go up and down completely randomly.
Pair Corralation between Beauty Health and Seaport Entertainment
Given the investment horizon of 90 days Beauty Health Co is expected to under-perform the Seaport Entertainment. In addition to that, Beauty Health is 1.26 times more volatile than Seaport Entertainment Group. It trades about -0.1 of its total potential returns per unit of risk. Seaport Entertainment Group is currently generating about 0.03 per unit of volatility. If you would invest 2,788 in Seaport Entertainment Group on September 15, 2024 and sell it today you would earn a total of 27.00 from holding Seaport Entertainment Group or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beauty Health Co vs. Seaport Entertainment Group
Performance |
| Timeline |
| Beauty Health |
| Seaport Entertainment |
Beauty Health and Seaport Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beauty Health and Seaport Entertainment
The main advantage of trading using opposite Beauty Health and Seaport Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beauty Health position performs unexpectedly, Seaport Entertainment 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 Seaport Entertainment will offset losses from the drop in Seaport Entertainment's long position.| Beauty Health vs. Clear Secure | Beauty Health vs. GXO Logistics | Beauty Health vs. Doximity | Beauty Health vs. Figs Inc |
| Seaport Entertainment vs. Lincoln Electric Holdings | Seaport Entertainment vs. European Wax Center | Seaport Entertainment vs. Beauty Health Co | Seaport Entertainment vs. Playstudios |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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