Correlation Between Bunge and HealthwarehouseCom

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

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

Diversification Opportunities for Bunge and HealthwarehouseCom

0.05

Correlation Coefficient

Bunge  HealthwarehouseCom

Significant diversification

The 3 months correlation between Bunge and HealthwarehouseCom is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bunge Limited and HealthwarehouseCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthwarehouseCom and Bunge 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 Bunge Limited are associated (or correlated) with HealthwarehouseCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthwarehouseCom has no effect on the direction of Bunge i.e., Bunge and HealthwarehouseCom go up and down completely randomly.

Pair Corralation between Bunge and HealthwarehouseCom

If you would invest  10,229  in Bunge Limited on January 30, 2024 and sell it today you would earn a total of  71.00  from holding Bunge Limited or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Bunge Limited  vs.  HealthwarehouseCom

Bunge Limited

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bunge Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Bunge reported solid returns over the last few months and may actually be approaching a breakup point.

HealthwarehouseCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HealthwarehouseCom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HealthwarehouseCom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bunge and HealthwarehouseCom

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

The idea behind Bunge Limited and HealthwarehouseCom 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.