Correlation Between Cass Information and National Health
Can any of the company-specific risk be diversified away by investing in both Cass Information and National 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 Cass Information and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and National Health Investors, you can compare the effects of market volatilities on Cass Information and National 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 Cass Information with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and National Health.
Diversification Opportunities for Cass Information and National Health
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cass and National is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Cass Information 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 Cass Information Systems are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Cass Information i.e., Cass Information and National Health go up and down completely randomly.
Pair Corralation between Cass Information and National Health
Assuming the 90 days horizon Cass Information is expected to generate 2.2 times less return on investment than National Health. In addition to that, Cass Information is 1.25 times more volatile than National Health Investors. It trades about 0.04 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.1 per unit of volatility. If you would invest 4,612 in National Health Investors on September 14, 2024 and sell it today you would earn a total of 2,338 from holding National Health Investors or generate 50.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. National Health Investors
Performance |
| Timeline |
| Cass Information Systems |
| National Health Investors |
Cass Information and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and National Health
The main advantage of trading using opposite Cass Information and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, National 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 National Health will offset losses from the drop in National Health's long position.| Cass Information vs. Media and Games | Cass Information vs. SOLSTAD OFFSHORE NK | Cass Information vs. ANGLER GAMING PLC | Cass Information vs. WT OFFSHORE |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |