Correlation Between Amexdrug and BellRock Brands

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

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

Diversification Opportunities for Amexdrug and BellRock Brands

1.0

Correlation Coefficient

Amexdrug  BellRock Brands

No risk reduction

The 3 months correlation between Amexdrug and BellRock is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Amexdrug and BellRock Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BellRock Brands and Amexdrug 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 Amexdrug are associated (or correlated) with BellRock Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BellRock Brands has no effect on the direction of Amexdrug i.e., Amexdrug and BellRock Brands go up and down completely randomly.

Pair Corralation between Amexdrug and BellRock Brands

If you would invest  0.20  in Amexdrug on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Amexdrug or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Amexdrug  vs.  BellRock Brands

Amexdrug

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amexdrug has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amexdrug is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

BellRock Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BellRock Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Amexdrug and BellRock Brands

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

The idea behind Amexdrug and BellRock Brands 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.