Correlation Between Cano Health and Brookdale Senior

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

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

Diversification Opportunities for Cano Health and Brookdale Senior

0.0

Correlation Coefficient

Cano Health  Brookdale Senior

Pay attention - limited upside

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

Pair Corralation between Cano Health and Brookdale Senior

If you would invest  568.00  in Brookdale Senior Living on November 29, 2024 and sell it today you would earn a total of  14.00  from holding Brookdale Senior Living or generate 2.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cano Health  vs.  Brookdale Senior Living

Cano Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cano Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cano Health is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Brookdale Senior Living

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brookdale Senior Living are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Brookdale Senior is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cano Health and Brookdale Senior

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

The idea behind Cano Health and Brookdale Senior Living 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.