Correlation Between Trellus Health and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Trellus Health and Beeks Trading 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 Trellus Health and Beeks Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trellus Health plc and Beeks Trading, you can compare the effects of market volatilities on Trellus Health and Beeks Trading 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 Trellus Health with a short position of Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellus Health and Beeks Trading.
Diversification Opportunities for Trellus Health and Beeks Trading
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trellus and Beeks is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health plc and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading and Trellus 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 Trellus Health plc are associated (or correlated) with Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Trellus Health i.e., Trellus Health and Beeks Trading go up and down completely randomly.
Pair Corralation between Trellus Health and Beeks Trading
Assuming the 90 days trading horizon Trellus Health plc is expected to under-perform the Beeks Trading. In addition to that, Trellus Health is 1.79 times more volatile than Beeks Trading. It trades about -0.08 of its total potential returns per unit of risk. Beeks Trading is currently generating about 0.06 per unit of volatility. If you would invest 13,200 in Beeks Trading on October 12, 2024 and sell it today you would earn a total of 14,000 from holding Beeks Trading or generate 106.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trellus Health plc vs. Beeks Trading
Performance |
| Timeline |
| Trellus Health plc |
| Beeks Trading |
Trellus Health and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trellus Health and Beeks Trading
The main advantage of trading using opposite Trellus Health and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellus Health position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Trellus Health vs. Berkshire Hathaway | Trellus Health vs. Samsung Electronics Co | Trellus Health vs. Samsung Electronics Co | Trellus Health vs. Chocoladefabriken Lindt Spruengli |
| Beeks Trading vs. Iron Mountain | Beeks Trading vs. Verizon Communications | Beeks Trading vs. Primorus Investments plc | Beeks Trading vs. Batm Advanced Communications |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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