Correlation Between ANGLO ASIAN and NIGHTINGALE HEALTH
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and NIGHTINGALE HEALTH 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 ANGLO ASIAN and NIGHTINGALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and NIGHTINGALE HEALTH EO, you can compare the effects of market volatilities on ANGLO ASIAN and NIGHTINGALE HEALTH 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 ANGLO ASIAN with a short position of NIGHTINGALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and NIGHTINGALE HEALTH.
Diversification Opportunities for ANGLO ASIAN and NIGHTINGALE HEALTH
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ANGLO and NIGHTINGALE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH and ANGLO ASIAN 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 ANGLO ASIAN MINING are associated (or correlated) with NIGHTINGALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGHTINGALE HEALTH has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and NIGHTINGALE HEALTH go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and NIGHTINGALE HEALTH
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to under-perform the NIGHTINGALE HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, ANGLO ASIAN MINING is 2.13 times less risky than NIGHTINGALE HEALTH. The stock trades about -0.13 of its potential returns per unit of risk. The NIGHTINGALE HEALTH EO is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 293.00 in NIGHTINGALE HEALTH EO on October 10, 2024 and sell it today you would earn a total of 7.00 from holding NIGHTINGALE HEALTH EO or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. NIGHTINGALE HEALTH EO
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| NIGHTINGALE HEALTH |
ANGLO ASIAN and NIGHTINGALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and NIGHTINGALE HEALTH
The main advantage of trading using opposite ANGLO ASIAN and NIGHTINGALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, NIGHTINGALE HEALTH 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 NIGHTINGALE HEALTH will offset losses from the drop in NIGHTINGALE HEALTH's long position.| ANGLO ASIAN vs. MCEWEN MINING INC | ANGLO ASIAN vs. Harmony Gold Mining | ANGLO ASIAN vs. Magnachip Semiconductor | ANGLO ASIAN vs. Suntory Beverage Food |
| NIGHTINGALE HEALTH vs. Zoom Video Communications | NIGHTINGALE HEALTH vs. COLUMBIA SPORTSWEAR | NIGHTINGALE HEALTH vs. Transport International Holdings | NIGHTINGALE HEALTH vs. BII Railway Transportation |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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