Correlation Between Global Health and Bendigo

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

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

Diversification Opportunities for Global Health and Bendigo

-0.59

Correlation Coefficient

Global Health  Bendigo

Excellent diversification

The 3 months correlation between Global and Bendigo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Bendigo And Adelaide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bendigo And Adelaide and Global 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 Global Health are associated (or correlated) with Bendigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bendigo And Adelaide has no effect on the direction of Global Health i.e., Global Health and Bendigo go up and down completely randomly.

Pair Corralation between Global Health and Bendigo

Assuming the 90 days trading horizon Global Health is expected to generate 1.35 times less return on investment than Bendigo. In addition to that, Global Health is 4.43 times more volatile than Bendigo And Adelaide. It trades about 0.01 of its total potential returns per unit of risk. Bendigo And Adelaide is currently generating about 0.07 per unit of volatility. If you would invest  889.00  in Bendigo And Adelaide on October 22, 2024 and sell it today you would earn a total of  427.00  from holding Bendigo And Adelaide or generate 48.03% return on investment over 90 days.

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

Global Health  vs.  Bendigo And Adelaide

Global Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bendigo And Adelaide

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bendigo And Adelaide are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bendigo may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Global Health and Bendigo

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

The idea behind Global Health and Bendigo And Adelaide 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.