Correlation Between NIGHTINGALE HEALTH and De Grey
Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and De Grey 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 De Grey 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 De Grey Mining, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and De Grey 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 De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and De Grey.
Diversification Opportunities for NIGHTINGALE HEALTH and De Grey
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NIGHTINGALE and DGD is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining 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 De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and De Grey go up and down completely randomly.
Pair Corralation between NIGHTINGALE HEALTH and De Grey
Assuming the 90 days horizon NIGHTINGALE HEALTH is expected to generate 13.39 times less return on investment than De Grey. But when comparing it to its historical volatility, NIGHTINGALE HEALTH EO is 1.97 times less risky than De Grey. It trades about 0.02 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 92.00 in De Grey Mining on October 30, 2024 and sell it today you would earn a total of 22.00 from holding De Grey Mining or generate 23.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIGHTINGALE HEALTH EO vs. De Grey Mining
Performance |
| Timeline |
| NIGHTINGALE HEALTH |
| De Grey Mining |
NIGHTINGALE HEALTH and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGHTINGALE HEALTH and De Grey
The main advantage of trading using opposite NIGHTINGALE HEALTH and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.| NIGHTINGALE HEALTH vs. NH HOTEL GROUP | NIGHTINGALE HEALTH vs. SCIENCE IN SPORT | NIGHTINGALE HEALTH vs. BII Railway Transportation | NIGHTINGALE HEALTH vs. Pebblebrook Hotel Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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