Correlation Between NORDHEALTH and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both NORDHEALTH and FEMALE 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 NORDHEALTH and FEMALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORDHEALTH AS NK and FEMALE HEALTH, you can compare the effects of market volatilities on NORDHEALTH and FEMALE 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 NORDHEALTH with a short position of FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDHEALTH and FEMALE HEALTH.
Diversification Opportunities for NORDHEALTH and FEMALE HEALTH
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NORDHEALTH and FEMALE is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding NORDHEALTH AS NK and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH and NORDHEALTH 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 NORDHEALTH AS NK are associated (or correlated) with FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of NORDHEALTH i.e., NORDHEALTH and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between NORDHEALTH and FEMALE HEALTH
Assuming the 90 days horizon NORDHEALTH AS NK is expected to generate 0.88 times more return on investment than FEMALE HEALTH. However, NORDHEALTH AS NK is 1.13 times less risky than FEMALE HEALTH. It trades about 0.04 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.04 per unit of risk. If you would invest 187.00 in NORDHEALTH AS NK on August 24, 2024 and sell it today you would earn a total of 120.00 from holding NORDHEALTH AS NK or generate 64.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDHEALTH AS NK vs. FEMALE HEALTH
Performance |
| Timeline |
| NORDHEALTH AS NK |
| FEMALE HEALTH |
NORDHEALTH and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDHEALTH and FEMALE HEALTH
The main advantage of trading using opposite NORDHEALTH and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDHEALTH position performs unexpectedly, FEMALE 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.The idea behind NORDHEALTH AS NK and FEMALE HEALTH 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.| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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