Correlation Between CAIRN HOMES and NATIONAL HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both CAIRN HOMES 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 CAIRN HOMES and NATIONAL HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIRN HOMES EO and NATIONAL HEALTHCARE, you can compare the effects of market volatilities on CAIRN HOMES 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 CAIRN HOMES with a short position of NATIONAL HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIRN HOMES and NATIONAL HEALTHCARE.
Diversification Opportunities for CAIRN HOMES and NATIONAL HEALTHCARE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAIRN and NATIONAL is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding CAIRN HOMES EO and NATIONAL HEALTHCARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL HEALTHCARE and CAIRN HOMES 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 CAIRN HOMES EO 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 CAIRN HOMES i.e., CAIRN HOMES and NATIONAL HEALTHCARE go up and down completely randomly.
Pair Corralation between CAIRN HOMES and NATIONAL HEALTHCARE
Assuming the 90 days horizon CAIRN HOMES EO is expected to generate 1.8 times more return on investment than NATIONAL HEALTHCARE. However, CAIRN HOMES is 1.8 times more volatile than NATIONAL HEALTHCARE. It trades about 0.04 of its potential returns per unit of risk. NATIONAL HEALTHCARE is currently generating about -0.62 per unit of risk. If you would invest 224.00 in CAIRN HOMES EO on October 11, 2024 and sell it today you would earn a total of 3.00 from holding CAIRN HOMES EO or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIRN HOMES EO vs. NATIONAL HEALTHCARE
Performance |
| Timeline |
| CAIRN HOMES EO |
| NATIONAL HEALTHCARE |
CAIRN HOMES and NATIONAL HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIRN HOMES and NATIONAL HEALTHCARE
The main advantage of trading using opposite CAIRN HOMES and NATIONAL HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIRN HOMES 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.| CAIRN HOMES vs. OURGAME INTHOLDL 00005 | CAIRN HOMES vs. CN MODERN DAIRY | CAIRN HOMES vs. Boyd Gaming | CAIRN HOMES vs. THAI BEVERAGE |
| NATIONAL HEALTHCARE vs. Neinor Homes SA | NATIONAL HEALTHCARE vs. Virtus Investment Partners | NATIONAL HEALTHCARE vs. Taylor Morrison Home | NATIONAL HEALTHCARE vs. CAIRN HOMES EO |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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