Correlation Between Bendigo and Global Health
Can any of the company-specific risk be diversified away by investing in both Bendigo and Global 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 Bendigo and Global Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bendigo And Adelaide and Global Health, you can compare the effects of market volatilities on Bendigo and Global 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 Bendigo with a short position of Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Global Health.
Diversification Opportunities for Bendigo and Global Health
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bendigo and Global is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo And Adelaide and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health and Bendigo 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 Bendigo And Adelaide are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Bendigo i.e., Bendigo and Global Health go up and down completely randomly.
Pair Corralation between Bendigo and Global Health
Assuming the 90 days trading horizon Bendigo And Adelaide is expected to generate 0.51 times more return on investment than Global Health. However, Bendigo And Adelaide is 1.97 times less risky than Global Health. It trades about 0.12 of its potential returns per unit of risk. Global Health is currently generating about -0.09 per unit of risk. If you would invest 1,215 in Bendigo And Adelaide on October 22, 2024 and sell it today you would earn a total of 101.00 from holding Bendigo And Adelaide or generate 8.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bendigo And Adelaide vs. Global Health
Performance |
Timeline |
Bendigo And Adelaide |
Global Health |
Bendigo and Global Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bendigo and Global Health
The main advantage of trading using opposite Bendigo and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bendigo position performs unexpectedly, Global 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 Global Health will offset losses from the drop in Global Health's long position.Bendigo vs. Phoslock Environmental Technologies | Bendigo vs. Red Hill Iron | Bendigo vs. ARN Media Limited | Bendigo vs. oOhMedia |
Global Health vs. Aneka Tambang Tbk | Global Health vs. Macquarie Group | Global Health vs. BHP Group Limited | Global Health vs. Block Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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