Correlation Between Charwood Energy and BEBO Health

Can any of the company-specific risk be diversified away by investing in both Charwood Energy and BEBO Health 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 Charwood Energy and BEBO Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Charwood Energy SA and BEBO Health SA, you can compare the effects of market volatilities on Charwood Energy and BEBO Health 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 Charwood Energy with a short position of BEBO Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charwood Energy and BEBO Health.

Diversification Opportunities for Charwood Energy and BEBO Health

0.0

Correlation Coefficient

Charwood Energy  BEBO Health

Pay attention - limited upside

The 3 months correlation between Charwood and BEBO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Charwood Energy SA and BEBO Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEBO Health SA and Charwood Energy 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 Charwood Energy SA are associated (or correlated) with BEBO Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEBO Health SA has no effect on the direction of Charwood Energy i.e., Charwood Energy and BEBO Health go up and down completely randomly.

Pair Corralation between Charwood Energy and BEBO Health

If you would invest  230.00  in Charwood Energy SA on October 27, 2024 and sell it today you would earn a total of  84.00  from holding Charwood Energy SA or generate 36.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Charwood Energy SA  vs.  BEBO Health SA

Charwood Energy SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Charwood Energy SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Charwood Energy reported solid returns over the last few months and may actually be approaching a breakup point.

BEBO Health SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BEBO Health SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BEBO Health is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Charwood Energy and BEBO Health

The main advantage of trading using opposite Charwood Energy and BEBO Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charwood Energy position performs unexpectedly, BEBO Health 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 BEBO Health will offset losses from the drop in BEBO Health's long position.

The idea behind Charwood Energy SA and BEBO Health SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.