Correlation Between Bellevue Healthcare and Roebuck Food

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

By analyzing existing cross correlation between Bellevue Healthcare Trust and Roebuck Food Group, you can compare the effects of market volatilities on Bellevue Healthcare and Roebuck Food 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 Bellevue Healthcare with a short position of Roebuck Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellevue Healthcare and Roebuck Food.

Diversification Opportunities for Bellevue Healthcare and Roebuck Food

0.57

Correlation Coefficient

Bellevue Healthcare  Roebuck Food

Very weak diversification

The 3 months correlation between Bellevue and Roebuck is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Healthcare Trust and Roebuck Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roebuck Food Group and Bellevue 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 Bellevue Healthcare Trust are associated (or correlated) with Roebuck Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roebuck Food Group has no effect on the direction of Bellevue Healthcare i.e., Bellevue Healthcare and Roebuck Food go up and down completely randomly.

Pair Corralation between Bellevue Healthcare and Roebuck Food

Assuming the 90 days trading horizon Bellevue Healthcare Trust is expected to generate 1.15 times more return on investment than Roebuck Food. However, Bellevue Healthcare is 1.15 times more volatile than Roebuck Food Group. It trades about 0.35 of its potential returns per unit of risk. Roebuck Food Group is currently generating about 0.27 per unit of risk. If you would invest  13,860  in Bellevue Healthcare Trust on October 22, 2024 and sell it today you would earn a total of  860.00  from holding Bellevue Healthcare Trust or generate 6.2% return on investment over 90 days.

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

Bellevue Healthcare Trust  vs.  Roebuck Food Group

Bellevue Healthcare Trust

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bellevue Healthcare Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Bellevue Healthcare is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Roebuck Food Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Roebuck Food Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Roebuck Food is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bellevue Healthcare and Roebuck Food

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

The idea behind Bellevue Healthcare Trust and Roebuck Food Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.