Correlation Between American Shared and Numinus Wellness
Can any of the company-specific risk be diversified away by investing in both American Shared and Numinus Wellness 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 American Shared and Numinus Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shared Hospital and Numinus Wellness, you can compare the effects of market volatilities on American Shared and Numinus Wellness 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 American Shared with a short position of Numinus Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shared and Numinus Wellness.
Diversification Opportunities for American Shared and Numinus Wellness
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Numinus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and Numinus Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Numinus Wellness and American Shared 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 American Shared Hospital are associated (or correlated) with Numinus Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Numinus Wellness has no effect on the direction of American Shared i.e., American Shared and Numinus Wellness go up and down completely randomly.
Pair Corralation between American Shared and Numinus Wellness
Considering the 90-day investment horizon American Shared Hospital is expected to under-perform the Numinus Wellness. But the stock apears to be less risky and, when comparing its historical volatility, American Shared Hospital is 2.48 times less risky than Numinus Wellness. The stock trades about -0.22 of its potential returns per unit of risk. The Numinus Wellness is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.90 in Numinus Wellness on October 15, 2024 and sell it today you would earn a total of 0.20 from holding Numinus Wellness or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Shared Hospital vs. Numinus Wellness
Performance |
| Timeline |
| American Shared Hospital |
| Numinus Wellness |
American Shared and Numinus Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shared and Numinus Wellness
The main advantage of trading using opposite American Shared and Numinus Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shared position performs unexpectedly, Numinus Wellness 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 Numinus Wellness will offset losses from the drop in Numinus Wellness' long position.| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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