Correlation Between NIGHTINGALE HEALTH and Aon PLC
Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and Aon PLC 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 Aon PLC 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 Aon PLC, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and Aon PLC 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 Aon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and Aon PLC.
Diversification Opportunities for NIGHTINGALE HEALTH and Aon PLC
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NIGHTINGALE and Aon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and Aon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aon PLC 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 Aon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aon PLC has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and Aon PLC go up and down completely randomly.
Pair Corralation between NIGHTINGALE HEALTH and Aon PLC
Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to under-perform the Aon PLC. In addition to that, NIGHTINGALE HEALTH is 1.97 times more volatile than Aon PLC. It trades about -0.01 of its total potential returns per unit of risk. Aon PLC is currently generating about 0.15 per unit of volatility. If you would invest 34,096 in Aon PLC on November 6, 2024 and sell it today you would earn a total of 1,524 from holding Aon PLC or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIGHTINGALE HEALTH EO vs. Aon PLC
Performance |
| Timeline |
| NIGHTINGALE HEALTH |
| Aon PLC |
NIGHTINGALE HEALTH and Aon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGHTINGALE HEALTH and Aon PLC
The main advantage of trading using opposite NIGHTINGALE HEALTH and Aon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, Aon PLC 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 Aon PLC will offset losses from the drop in Aon PLC's long position.| NIGHTINGALE HEALTH vs. Titan Machinery | NIGHTINGALE HEALTH vs. TRADEGATE | NIGHTINGALE HEALTH vs. TITAN MACHINERY | NIGHTINGALE HEALTH vs. Canon Marketing Japan |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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