Correlation Between Bellevue Healthcare and Software Circle

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

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

Diversification Opportunities for Bellevue Healthcare and Software Circle

0.51

Correlation Coefficient

Bellevue Healthcare  Software Circle

Very weak diversification

The 3 months correlation between Bellevue and Software is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Healthcare Trust and Software Circle plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Circle plc and Bellevue 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 Bellevue Healthcare Trust are associated (or correlated) with Software Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Circle plc has no effect on the direction of Bellevue Healthcare i.e., Bellevue Healthcare and Software Circle go up and down completely randomly.

Pair Corralation between Bellevue Healthcare and Software Circle

Assuming the 90 days trading horizon Bellevue Healthcare Trust is expected to under-perform the Software Circle. But the stock apears to be less risky and, when comparing its historical volatility, Bellevue Healthcare Trust is 1.79 times less risky than Software Circle. The stock trades about -0.02 of its potential returns per unit of risk. The Software Circle plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  925.00  in Software Circle plc on April 17, 2025 and sell it today you would earn a total of  1,975  from holding Software Circle plc or generate 213.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Bellevue Healthcare Trust  vs.  Software Circle plc

Bellevue Healthcare Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bellevue Healthcare Trust are ranked lower than 6 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Software Circle plc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bellevue Healthcare and Software Circle

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

The idea behind Bellevue Healthcare Trust and Software Circle plc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.