Correlation Between NIGHTINGALE HEALTH and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and Advanced Medical.
Diversification Opportunities for NIGHTINGALE HEALTH and Advanced Medical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NIGHTINGALE and Advanced is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and Advanced Medical go up and down completely randomly.
Pair Corralation between NIGHTINGALE HEALTH and Advanced Medical
Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to under-perform the Advanced Medical. But the stock apears to be less risky and, when comparing its historical volatility, NIGHTINGALE HEALTH EO is 1.06 times less risky than Advanced Medical. The stock trades about -0.03 of its potential returns per unit of risk. The Advanced Medical Solutions is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 226.00 in Advanced Medical Solutions on October 25, 2024 and sell it today you would earn a total of 38.00 from holding Advanced Medical Solutions or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIGHTINGALE HEALTH EO vs. Advanced Medical Solutions
Performance |
| Timeline |
| NIGHTINGALE HEALTH |
| Advanced Medical Sol |
NIGHTINGALE HEALTH and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGHTINGALE HEALTH and Advanced Medical
The main advantage of trading using opposite NIGHTINGALE HEALTH and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| NIGHTINGALE HEALTH vs. Veeva Systems | NIGHTINGALE HEALTH vs. Teladoc | NIGHTINGALE HEALTH vs. Evolent Health | NIGHTINGALE HEALTH vs. CompuGroup Medical SE |
| Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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