Correlation Between NIGHTINGALE HEALTH and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and STMicroelectronics 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 STMicroelectronics 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 STMicroelectronics NV, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and STMicroelectronics.
Diversification Opportunities for NIGHTINGALE HEALTH and STMicroelectronics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NIGHTINGALE and STMicroelectronics is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and STMicroelectronics go up and down completely randomly.
Pair Corralation between NIGHTINGALE HEALTH and STMicroelectronics
Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to under-perform the STMicroelectronics. But the stock apears to be less risky and, when comparing its historical volatility, NIGHTINGALE HEALTH EO is 1.15 times less risky than STMicroelectronics. The stock trades about -0.03 of its potential returns per unit of risk. The STMicroelectronics NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,420 in STMicroelectronics NV on October 25, 2024 and sell it today you would earn a total of 48.00 from holding STMicroelectronics NV or generate 1.98% 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. STMicroelectronics NV
Performance |
| Timeline |
| NIGHTINGALE HEALTH |
| STMicroelectronics |
NIGHTINGALE HEALTH and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGHTINGALE HEALTH and STMicroelectronics
The main advantage of trading using opposite NIGHTINGALE HEALTH and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| NIGHTINGALE HEALTH vs. Veeva Systems | NIGHTINGALE HEALTH vs. Teladoc | NIGHTINGALE HEALTH vs. Evolent Health | NIGHTINGALE HEALTH vs. CompuGroup Medical SE |
| STMicroelectronics vs. GameStop Corp | STMicroelectronics vs. Games Workshop Group | STMicroelectronics vs. Geely Automobile Holdings | STMicroelectronics vs. MAVEN WIRELESS SWEDEN |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |