Correlation Between SHIP HEALTHCARE and National Health
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and National Health Investors, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and National Health.
Diversification Opportunities for SHIP HEALTHCARE and National Health
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SHIP and National is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and National Health go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and National Health
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 2.25 times more return on investment than National Health. However, SHIP HEALTHCARE is 2.25 times more volatile than National Health Investors. It trades about 0.06 of its potential returns per unit of risk. National Health Investors is currently generating about 0.1 per unit of risk. If you would invest 824.00 in SHIP HEALTHCARE HLDGINC on November 8, 2024 and sell it today you would earn a total of 426.00 from holding SHIP HEALTHCARE HLDGINC or generate 51.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. National Health Investors
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| National Health Investors |
SHIP HEALTHCARE and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and National Health
The main advantage of trading using opposite SHIP HEALTHCARE and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. ETFS Coffee ETC | SHIP HEALTHCARE vs. URBAN OUTFITTERS | SHIP HEALTHCARE vs. PennyMac Mortgage Investment | SHIP HEALTHCARE vs. CHRYSALIS INVESTMENTS LTD |
| National Health vs. Acadia Healthcare | National Health vs. SHIP HEALTHCARE HLDGINC | National Health vs. MPH Health Care | National Health vs. Sixt Leasing SE |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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