Correlation Between NIGHTINGALE HEALTH and FARM 51
Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and FARM 51 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 FARM 51 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 FARM 51 GROUP, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and FARM 51 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 FARM 51. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and FARM 51.
Diversification Opportunities for NIGHTINGALE HEALTH and FARM 51
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NIGHTINGALE and FARM is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and FARM 51 GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM 51 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 FARM 51. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM 51 GROUP has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and FARM 51 go up and down completely randomly.
Pair Corralation between NIGHTINGALE HEALTH and FARM 51
Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to generate 0.94 times more return on investment than FARM 51. However, NIGHTINGALE HEALTH EO is 1.07 times less risky than FARM 51. It trades about 0.2 of its potential returns per unit of risk. FARM 51 GROUP is currently generating about -0.05 per unit of risk. If you would invest 281.00 in NIGHTINGALE HEALTH EO on October 11, 2024 and sell it today you would earn a total of 24.00 from holding NIGHTINGALE HEALTH EO or generate 8.54% 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. FARM 51 GROUP
Performance |
| Timeline |
| NIGHTINGALE HEALTH |
| FARM 51 GROUP |
NIGHTINGALE HEALTH and FARM 51 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGHTINGALE HEALTH and FARM 51
The main advantage of trading using opposite NIGHTINGALE HEALTH and FARM 51 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, FARM 51 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 FARM 51 will offset losses from the drop in FARM 51's long position.| NIGHTINGALE HEALTH vs. Live Nation Entertainment | NIGHTINGALE HEALTH vs. Lifeway Foods | NIGHTINGALE HEALTH vs. PENN Entertainment | NIGHTINGALE HEALTH vs. PARKEN Sport Entertainment |
| FARM 51 vs. PKSHA TECHNOLOGY INC | FARM 51 vs. Warner Music Group | FARM 51 vs. BJs Restaurants | FARM 51 vs. ETFS Coffee ETC |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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