Correlation Between Viemed Healthcare and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and Bowhead Specialty 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 Viemed Healthcare and Bowhead Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and Bowhead Specialty Holdings, you can compare the effects of market volatilities on Viemed Healthcare and Bowhead Specialty 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 Viemed Healthcare with a short position of Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and Bowhead Specialty.
Diversification Opportunities for Viemed Healthcare and Bowhead Specialty
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Viemed and Bowhead is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Bowhead Specialty go up and down completely randomly.
Pair Corralation between Viemed Healthcare and Bowhead Specialty
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 3.34 times less return on investment than Bowhead Specialty. In addition to that, Viemed Healthcare is 1.2 times more volatile than Bowhead Specialty Holdings. It trades about 0.12 of its total potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about 0.49 per unit of volatility. If you would invest 2,968 in Bowhead Specialty Holdings on September 4, 2024 and sell it today you would earn a total of 613.00 from holding Bowhead Specialty Holdings or generate 20.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. Bowhead Specialty Holdings
Performance |
| Timeline |
| Viemed Healthcare |
| Bowhead Specialty |
Viemed Healthcare and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and Bowhead Specialty
The main advantage of trading using opposite Viemed Healthcare and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty's long position.| Viemed Healthcare vs. Baxter International | Viemed Healthcare vs. West Pharmaceutical Services | Viemed Healthcare vs. ResMed Inc | Viemed Healthcare vs. The Cooper Companies, |
| Bowhead Specialty vs. Progressive Corp | Bowhead Specialty vs. Cincinnati Financial | Bowhead Specialty vs. W R Berkley | Bowhead Specialty vs. The Allstate |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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