Correlation Between Hargreaves Lansdown and Bellevue Healthcare

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

By analyzing existing cross correlation between Hargreaves Lansdown plc and Bellevue Healthcare Trust, you can compare the effects of market volatilities on Hargreaves Lansdown and Bellevue Healthcare 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 Hargreaves Lansdown with a short position of Bellevue Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hargreaves Lansdown and Bellevue Healthcare.

Diversification Opportunities for Hargreaves Lansdown and Bellevue Healthcare

-0.34

Correlation Coefficient

Hargreaves Lansdown  Bellevue Healthcare

Very good diversification

The 3 months correlation between Hargreaves and Bellevue is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hargreaves Lansdown plc and Bellevue Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Healthcare Trust and Hargreaves Lansdown 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 Hargreaves Lansdown plc are associated (or correlated) with Bellevue Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Healthcare Trust has no effect on the direction of Hargreaves Lansdown i.e., Hargreaves Lansdown and Bellevue Healthcare go up and down completely randomly.

Pair Corralation between Hargreaves Lansdown and Bellevue Healthcare

Assuming the 90 days trading horizon Hargreaves Lansdown is expected to generate 1.24 times less return on investment than Bellevue Healthcare. But when comparing it to its historical volatility, Hargreaves Lansdown plc is 10.22 times less risky than Bellevue Healthcare. It trades about 0.2 of its potential returns per unit of risk. Bellevue Healthcare Trust is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  14,720  in Bellevue Healthcare Trust on October 11, 2024 and sell it today you would earn a total of  200.00  from holding Bellevue Healthcare Trust or generate 1.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Hargreaves Lansdown plc  vs.  Bellevue Healthcare Trust

Hargreaves Lansdown plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hargreaves Lansdown plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hargreaves Lansdown is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bellevue Healthcare Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bellevue Healthcare Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Bellevue Healthcare is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hargreaves Lansdown and Bellevue Healthcare

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

The idea behind Hargreaves Lansdown plc and Bellevue Healthcare Trust 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.