Correlation Between Global Ship and National Health
Can any of the company-specific risk be diversified away by investing in both Global Ship and National Health 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 Global Ship and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and National Health Investors, you can compare the effects of market volatilities on Global Ship and National Health 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 Global Ship with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and National Health.
Diversification Opportunities for Global Ship and National Health
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and National is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Global Ship 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 Global Ship Lease are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Global Ship i.e., Global Ship and National Health go up and down completely randomly.
Pair Corralation between Global Ship and National Health
Assuming the 90 days horizon Global Ship is expected to generate 1.68 times less return on investment than National Health. In addition to that, Global Ship is 1.09 times more volatile than National Health Investors. It trades about 0.05 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.09 per unit of volatility. If you would invest 4,476 in National Health Investors on August 31, 2024 and sell it today you would earn a total of 2,774 from holding National Health Investors or generate 61.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. National Health Investors
Performance |
| Timeline |
| Global Ship Lease |
| National Health Investors |
Global Ship and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and National Health
The main advantage of trading using opposite Global Ship and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| Global Ship vs. Coeur Mining | Global Ship vs. IMAGIN MEDICAL INC | Global Ship vs. AVITA Medical | Global Ship vs. Consolidated Communications Holdings |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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