Correlation Between BellRock Brands and Filament Health

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

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

Diversification Opportunities for BellRock Brands and Filament Health

0.0

Correlation Coefficient

BellRock Brands  Filament Health

Pay attention - limited upside

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

Pair Corralation between BellRock Brands and Filament Health

Assuming the 90 days horizon BellRock Brands is expected to generate 5.74 times more return on investment than Filament Health. However, BellRock Brands is 5.74 times more volatile than Filament Health Corp. It trades about 0.09 of its potential returns per unit of risk. Filament Health Corp is currently generating about 0.06 per unit of risk. If you would invest  0.00  in BellRock Brands on December 4, 2024 and sell it today you would earn a total of  0.01  from holding BellRock Brands or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

BellRock Brands  vs.  Filament Health Corp

BellRock Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days BellRock Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BellRock Brands is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Filament Health Corp

Risk-Adjusted Performance

Weak

Over the last 90 days Filament Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile essential indicators, Filament Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BellRock Brands and Filament Health

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

The idea behind BellRock Brands and Filament Health Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.