Correlation Between WIMFARM SA and National Health
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA 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 WIMFARM SA and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and National Health Investors, you can compare the effects of market volatilities on WIMFARM SA 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 WIMFARM SA with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and National Health.
Diversification Opportunities for WIMFARM SA and National Health
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WIMFARM and National is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO 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 WIMFARM SA 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 WIMFARM SA EO 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 WIMFARM SA i.e., WIMFARM SA and National Health go up and down completely randomly.
Pair Corralation between WIMFARM SA and National Health
Assuming the 90 days horizon WIMFARM SA EO is expected to generate 3.23 times more return on investment than National Health. However, WIMFARM SA is 3.23 times more volatile than National Health Investors. It trades about 0.16 of its potential returns per unit of risk. National Health Investors is currently generating about -0.07 per unit of risk. If you would invest 342.00 in WIMFARM SA EO on October 16, 2024 and sell it today you would earn a total of 49.00 from holding WIMFARM SA EO or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. National Health Investors
Performance |
| Timeline |
| WIMFARM SA EO |
| National Health Investors |
WIMFARM SA and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and National Health
The main advantage of trading using opposite WIMFARM SA and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA 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.| WIMFARM SA vs. Magnachip Semiconductor | WIMFARM SA vs. Elmos Semiconductor SE | WIMFARM SA vs. BE Semiconductor Industries | WIMFARM SA vs. GRUPO CARSO A1 |
| National Health vs. TYSON FOODS A | National Health vs. INDOFOOD AGRI RES | National Health vs. COFCO Joycome Foods | National Health vs. SENECA FOODS A |
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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