Correlation Between NIGHTINGALE HEALTH and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and ALGOMA STEEL 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 ALGOMA STEEL 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 ALGOMA STEEL GROUP, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and ALGOMA STEEL.
Diversification Opportunities for NIGHTINGALE HEALTH and ALGOMA STEEL
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NIGHTINGALE and ALGOMA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between NIGHTINGALE HEALTH and ALGOMA STEEL
Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to generate 0.9 times more return on investment than ALGOMA STEEL. However, NIGHTINGALE HEALTH EO is 1.11 times less risky than ALGOMA STEEL. It trades about 0.13 of its potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about -0.29 per unit of risk. If you would invest 281.00 in NIGHTINGALE HEALTH EO on October 12, 2024 and sell it today you would earn a total of 16.00 from holding NIGHTINGALE HEALTH EO or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
NIGHTINGALE HEALTH EO vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| NIGHTINGALE HEALTH |
| ALGOMA STEEL GROUP |
NIGHTINGALE HEALTH and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGHTINGALE HEALTH and ALGOMA STEEL
The main advantage of trading using opposite NIGHTINGALE HEALTH and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| NIGHTINGALE HEALTH vs. HYATT HOTELS A | NIGHTINGALE HEALTH vs. Delta Air Lines | NIGHTINGALE HEALTH vs. Hyatt Hotels | NIGHTINGALE HEALTH vs. SYSTEMAIR AB |
| ALGOMA STEEL vs. FEMALE HEALTH | ALGOMA STEEL vs. Easy Software AG | ALGOMA STEEL vs. NIGHTINGALE HEALTH EO | ALGOMA STEEL vs. Molina Healthcare |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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