Correlation Between Diversified Healthcare and BG Foods
Can any of the company-specific risk be diversified away by investing in both Diversified Healthcare and BG Foods 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 Diversified Healthcare and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diversified Healthcare Trust and BG Foods, you can compare the effects of market volatilities on Diversified Healthcare and BG Foods 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 Diversified Healthcare with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diversified Healthcare and BG Foods.
Diversification Opportunities for Diversified Healthcare and BG Foods
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diversified and BGS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Diversified Healthcare Trust and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods and Diversified Healthcare 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 Diversified Healthcare Trust are associated (or correlated) with BG Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Foods has no effect on the direction of Diversified Healthcare i.e., Diversified Healthcare and BG Foods go up and down completely randomly.
Pair Corralation between Diversified Healthcare and BG Foods
Considering the 90-day investment horizon Diversified Healthcare Trust is expected to generate 2.12 times more return on investment than BG Foods. However, Diversified Healthcare is 2.12 times more volatile than BG Foods. It trades about 0.01 of its potential returns per unit of risk. BG Foods is currently generating about -0.02 per unit of risk. If you would invest 242.00 in Diversified Healthcare Trust on January 25, 2024 and sell it today you would lose (1.00) from holding Diversified Healthcare Trust or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diversified Healthcare Trust vs. BG Foods
Performance |
| Timeline |
| Diversified Healthcare |
| BG Foods |
Diversified Healthcare and BG Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diversified Healthcare and BG Foods
The main advantage of trading using opposite Diversified Healthcare and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diversified Healthcare position performs unexpectedly, BG Foods 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 BG Foods will offset losses from the drop in BG Foods' long position.| Diversified Healthcare vs. Global Medical REIT | Diversified Healthcare vs. Healthpeak Properties | Diversified Healthcare vs. Ventas Inc | Diversified Healthcare vs. National Health Investors |
| BG Foods vs. Bunge Limited | BG Foods vs. Archer Daniels Midland | BG Foods vs. Fresh Del Monte | BG Foods vs. Limoneira Co |
Check out your portfolio center.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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