Correlation Between Cardano and NATIONAL HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Cardano and NATIONAL HEALTHCARE 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 Cardano and NATIONAL HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and NATIONAL HEALTHCARE, you can compare the effects of market volatilities on Cardano and NATIONAL HEALTHCARE 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 Cardano with a short position of NATIONAL HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and NATIONAL HEALTHCARE.
Diversification Opportunities for Cardano and NATIONAL HEALTHCARE
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cardano and NATIONAL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and NATIONAL HEALTHCARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL HEALTHCARE and Cardano 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 Cardano are associated (or correlated) with NATIONAL HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL HEALTHCARE has no effect on the direction of Cardano i.e., Cardano and NATIONAL HEALTHCARE go up and down completely randomly.
Pair Corralation between Cardano and NATIONAL HEALTHCARE
Assuming the 90 days trading horizon Cardano is expected to generate 4.4 times more return on investment than NATIONAL HEALTHCARE. However, Cardano is 4.4 times more volatile than NATIONAL HEALTHCARE. It trades about -0.12 of its potential returns per unit of risk. NATIONAL HEALTHCARE is currently generating about -0.7 per unit of risk. If you would invest 112.00 in Cardano on October 12, 2024 and sell it today you would lose (21.00) from holding Cardano or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Cardano vs. NATIONAL HEALTHCARE
Performance |
| Timeline |
| Cardano |
| NATIONAL HEALTHCARE |
Cardano and NATIONAL HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and NATIONAL HEALTHCARE
The main advantage of trading using opposite Cardano and NATIONAL HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE will offset losses from the drop in NATIONAL HEALTHCARE's long position.The idea behind Cardano and NATIONAL HEALTHCARE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NATIONAL HEALTHCARE vs. Quaker Chemical | NATIONAL HEALTHCARE vs. KINGBOARD CHEMICAL | NATIONAL HEALTHCARE vs. INDO RAMA SYNTHETIC | NATIONAL HEALTHCARE vs. SAN MIGUEL BREWERY |
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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