Correlation Between Secure Property and Bellevue Healthcare

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

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

Diversification Opportunities for Secure Property and Bellevue Healthcare

0.14

Correlation Coefficient

Secure Property  Bellevue Healthcare

Average diversification

The 3 months correlation between Secure and Bellevue is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Secure Property Development 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 Secure Property 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 Secure Property Development 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 Secure Property i.e., Secure Property and Bellevue Healthcare go up and down completely randomly.

Pair Corralation between Secure Property and Bellevue Healthcare

Assuming the 90 days trading horizon Secure Property Development is expected to under-perform the Bellevue Healthcare. In addition to that, Secure Property is 1.24 times more volatile than Bellevue Healthcare Trust. It trades about -0.12 of its total potential returns per unit of risk. Bellevue Healthcare Trust is currently generating about -0.07 per unit of volatility. If you would invest  14,720  in Bellevue Healthcare Trust on September 27, 2024 and sell it today you would lose (780.00) from holding Bellevue Healthcare Trust or give up 5.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Secure Property Development  vs.  Bellevue Healthcare Trust

Secure Property Deve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bellevue Healthcare Trust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Secure Property and Bellevue Healthcare

The main advantage of trading using opposite Secure Property and Bellevue Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secure Property 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 Secure Property Development 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.