Correlation Between Naturhouse Health and Admiral Group
Can any of the company-specific risk be diversified away by investing in both Naturhouse Health and Admiral Group 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 Naturhouse Health and Admiral Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturhouse Health SA and Admiral Group PLC, you can compare the effects of market volatilities on Naturhouse Health and Admiral Group 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 Naturhouse Health with a short position of Admiral Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturhouse Health and Admiral Group.
Diversification Opportunities for Naturhouse Health and Admiral Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Naturhouse and Admiral is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health SA and Admiral Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admiral Group PLC and Naturhouse Health 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 Naturhouse Health SA are associated (or correlated) with Admiral Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admiral Group PLC has no effect on the direction of Naturhouse Health i.e., Naturhouse Health and Admiral Group go up and down completely randomly.
Pair Corralation between Naturhouse Health and Admiral Group
Assuming the 90 days trading horizon Naturhouse Health SA is expected to generate 0.94 times more return on investment than Admiral Group. However, Naturhouse Health SA is 1.06 times less risky than Admiral Group. It trades about 0.03 of its potential returns per unit of risk. Admiral Group PLC is currently generating about -0.09 per unit of risk. If you would invest 167.00 in Naturhouse Health SA on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Naturhouse Health SA or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Naturhouse Health SA vs. Admiral Group PLC
Performance |
| Timeline |
| Naturhouse Health |
| Admiral Group PLC |
Naturhouse Health and Admiral Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturhouse Health and Admiral Group
The main advantage of trading using opposite Naturhouse Health and Admiral Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse Health position performs unexpectedly, Admiral Group 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 Admiral Group will offset losses from the drop in Admiral Group's long position.| Naturhouse Health vs. Samsung Electronics Co | Naturhouse Health vs. Samsung Electronics Co | Naturhouse Health vs. Hyundai Motor | Naturhouse Health vs. Reliance Industries Ltd |
| Admiral Group vs. Royal Bank of | Admiral Group vs. Elmos Semiconductor SE | Admiral Group vs. Gear4music Plc | Admiral Group vs. Datalogic |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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