Correlation Between Synthomer Plc and Bellevue Healthcare
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and Bellevue Healthcare 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 Synthomer Plc and Bellevue Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Bellevue Healthcare Trust, you can compare the effects of market volatilities on Synthomer Plc and Bellevue Healthcare 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 Synthomer Plc with a short position of Bellevue Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Bellevue Healthcare.
Diversification Opportunities for Synthomer Plc and Bellevue Healthcare
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synthomer and Bellevue is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and Bellevue Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Healthcare Trust and Synthomer Plc 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 Synthomer plc are associated (or correlated) with Bellevue Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Healthcare Trust has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and Bellevue Healthcare go up and down completely randomly.
Pair Corralation between Synthomer Plc and Bellevue Healthcare
Assuming the 90 days trading horizon Synthomer plc is expected to generate 3.53 times more return on investment than Bellevue Healthcare. However, Synthomer Plc is 3.53 times more volatile than Bellevue Healthcare Trust. It trades about 0.01 of its potential returns per unit of risk. Bellevue Healthcare Trust is currently generating about 0.04 per unit of risk. If you would invest 18,050 in Synthomer plc on September 14, 2024 and sell it today you would lose (930.00) from holding Synthomer plc or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synthomer plc vs. Bellevue Healthcare Trust
Performance |
| Timeline |
| Synthomer plc |
| Bellevue Healthcare Trust |
Synthomer Plc and Bellevue Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Bellevue Healthcare
The main advantage of trading using opposite Synthomer Plc and Bellevue Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, Bellevue Healthcare 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 Bellevue Healthcare will offset losses from the drop in Bellevue Healthcare's long position.| Synthomer Plc vs. CAP LEASE AVIATION | Synthomer Plc vs. Melia Hotels | Synthomer Plc vs. AMG Advanced Metallurgical | Synthomer Plc vs. METALL ZUG AG |
| Bellevue Healthcare vs. Air Products Chemicals | Bellevue Healthcare vs. Cars Inc | Bellevue Healthcare vs. Host Hotels Resorts | Bellevue Healthcare vs. Synthomer plc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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