Correlation Between Naturhouse Health and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both Naturhouse Health and Spire 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 Naturhouse Health and Spire Healthcare 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 Spire Healthcare Group, you can compare the effects of market volatilities on Naturhouse Health and Spire 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 Naturhouse Health with a short position of Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturhouse Health and Spire Healthcare.
Diversification Opportunities for Naturhouse Health and Spire Healthcare
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Naturhouse and Spire is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health SA and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Naturhouse Health i.e., Naturhouse Health and Spire Healthcare go up and down completely randomly.
Pair Corralation between Naturhouse Health and Spire Healthcare
Assuming the 90 days trading horizon Naturhouse Health SA is expected to generate 0.91 times more return on investment than Spire Healthcare. However, Naturhouse Health SA is 1.1 times less risky than Spire Healthcare. It trades about 0.05 of its potential returns per unit of risk. Spire Healthcare Group is currently generating about -0.01 per unit of risk. If you would invest 167.00 in Naturhouse Health SA on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Naturhouse Health SA or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naturhouse Health SA vs. Spire Healthcare Group
Performance |
| Timeline |
| Naturhouse Health |
| Spire Healthcare |
Naturhouse Health and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturhouse Health and Spire Healthcare
The main advantage of trading using opposite Naturhouse Health and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse Health position performs unexpectedly, Spire 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| Naturhouse Health vs. Fevertree Drinks Plc | Naturhouse Health vs. Cairn Homes PLC | Naturhouse Health vs. Kinnevik Investment AB | Naturhouse Health vs. Livermore Investments Group |
| Spire Healthcare vs. International Consolidated Airlines | Spire Healthcare vs. JB Hunt Transport | Spire Healthcare vs. DXC Technology Co | Spire Healthcare vs. Uber Technologies |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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