Correlation Between NIGHTINGALE HEALTH and ABERFORTH SMCOS
Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and ABERFORTH SMCOS 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 NIGHTINGALE HEALTH and ABERFORTH SMCOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIGHTINGALE HEALTH EO and ABERFORTH SMCOS TRLS 01, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and ABERFORTH SMCOS 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 NIGHTINGALE HEALTH with a short position of ABERFORTH SMCOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and ABERFORTH SMCOS.
Diversification Opportunities for NIGHTINGALE HEALTH and ABERFORTH SMCOS
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NIGHTINGALE and ABERFORTH is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and ABERFORTH SMCOS TRLS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABERFORTH SMCOS TRLS and NIGHTINGALE HEALTH 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 NIGHTINGALE HEALTH EO are associated (or correlated) with ABERFORTH SMCOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABERFORTH SMCOS TRLS has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and ABERFORTH SMCOS go up and down completely randomly.
Pair Corralation between NIGHTINGALE HEALTH and ABERFORTH SMCOS
Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to generate 1.75 times more return on investment than ABERFORTH SMCOS. However, NIGHTINGALE HEALTH is 1.75 times more volatile than ABERFORTH SMCOS TRLS 01. It trades about -0.01 of its potential returns per unit of risk. ABERFORTH SMCOS TRLS 01 is currently generating about -0.11 per unit of risk. If you would invest 300.00 in NIGHTINGALE HEALTH EO on November 6, 2024 and sell it today you would lose (4.00) from holding NIGHTINGALE HEALTH EO or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIGHTINGALE HEALTH EO vs. ABERFORTH SMCOS TRLS 01
Performance |
| Timeline |
| NIGHTINGALE HEALTH |
| ABERFORTH SMCOS TRLS |
NIGHTINGALE HEALTH and ABERFORTH SMCOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGHTINGALE HEALTH and ABERFORTH SMCOS
The main advantage of trading using opposite NIGHTINGALE HEALTH and ABERFORTH SMCOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, ABERFORTH SMCOS 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 ABERFORTH SMCOS will offset losses from the drop in ABERFORTH SMCOS's long position.| NIGHTINGALE HEALTH vs. Titan Machinery | NIGHTINGALE HEALTH vs. TRADEGATE | NIGHTINGALE HEALTH vs. TITAN MACHINERY | NIGHTINGALE HEALTH vs. Canon Marketing Japan |
| ABERFORTH SMCOS vs. Solstad Offshore ASA | ABERFORTH SMCOS vs. EIDESVIK OFFSHORE NK | ABERFORTH SMCOS vs. Sims Metal Management | ABERFORTH SMCOS vs. Universal Health Realty |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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