Correlation Between NORDHEALTH and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both NORDHEALTH and FUYO GENERAL 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 FUYO GENERAL 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 FUYO GENERAL LEASE, you can compare the effects of market volatilities on NORDHEALTH and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDHEALTH and FUYO GENERAL.
Diversification Opportunities for NORDHEALTH and FUYO GENERAL
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NORDHEALTH and FUYO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NORDHEALTH AS NK and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of NORDHEALTH i.e., NORDHEALTH and FUYO GENERAL go up and down completely randomly.
Pair Corralation between NORDHEALTH and FUYO GENERAL
Assuming the 90 days horizon NORDHEALTH AS NK is expected to generate 3.52 times more return on investment than FUYO GENERAL. However, NORDHEALTH is 3.52 times more volatile than FUYO GENERAL LEASE. It trades about 0.04 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.02 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDHEALTH AS NK vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| NORDHEALTH AS NK |
| FUYO GENERAL LEASE |
NORDHEALTH and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDHEALTH and FUYO GENERAL
The main advantage of trading using opposite NORDHEALTH and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDHEALTH position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.The idea behind NORDHEALTH AS NK and FUYO GENERAL LEASE 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.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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