Correlation Between Bt Brands and Ardent Health

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

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

Diversification Opportunities for Bt Brands and Ardent Health

-0.1

Correlation Coefficient

Bt Brands  Ardent Health

Good diversification

The 3 months correlation between BTBD and Ardent is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Ardent Health Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardent Health Partners, and Bt Brands 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 Bt Brands are associated (or correlated) with Ardent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardent Health Partners, has no effect on the direction of Bt Brands i.e., Bt Brands and Ardent Health go up and down completely randomly.

Pair Corralation between Bt Brands and Ardent Health

Given the investment horizon of 90 days Bt Brands is expected to generate 1.85 times more return on investment than Ardent Health. However, Bt Brands is 1.85 times more volatile than Ardent Health Partners,. It trades about 0.01 of its potential returns per unit of risk. Ardent Health Partners, is currently generating about -0.04 per unit of risk. If you would invest  145.00  in Bt Brands on December 19, 2024 and sell it today you would lose (12.00) from holding Bt Brands or give up 8.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Bt Brands  vs.  Ardent Health Partners,

Bt Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bt Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Bt Brands is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ardent Health Partners,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ardent Health Partners, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bt Brands and Ardent Health

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

The idea behind Bt Brands and Ardent Health Partners, 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.