Correlation Between NORDHEALTH and EHEALTH
Can any of the company-specific risk be diversified away by investing in both NORDHEALTH and EHEALTH 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 EHEALTH 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 EHEALTH, you can compare the effects of market volatilities on NORDHEALTH and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDHEALTH and EHEALTH.
Diversification Opportunities for NORDHEALTH and EHEALTH
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORDHEALTH and EHEALTH is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NORDHEALTH AS NK and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of NORDHEALTH i.e., NORDHEALTH and EHEALTH go up and down completely randomly.
Pair Corralation between NORDHEALTH and EHEALTH
Assuming the 90 days horizon NORDHEALTH AS NK is expected to generate 1.5 times more return on investment than EHEALTH. However, NORDHEALTH is 1.5 times more volatile than EHEALTH. It trades about 0.14 of its potential returns per unit of risk. EHEALTH is currently generating about 0.05 per unit of risk. If you would invest 270.00 in NORDHEALTH AS NK on August 28, 2024 and sell it today you would earn a total of 37.00 from holding NORDHEALTH AS NK or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDHEALTH AS NK vs. EHEALTH
Performance |
| Timeline |
| NORDHEALTH AS NK |
| EHEALTH |
NORDHEALTH and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDHEALTH and EHEALTH
The main advantage of trading using opposite NORDHEALTH and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDHEALTH position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.The idea behind NORDHEALTH AS NK and EHEALTH 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.| EHEALTH vs. FUYO GENERAL LEASE | EHEALTH vs. EAGLE MATERIALS | EHEALTH vs. Fast Retailing Co | EHEALTH vs. Lendlease Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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