Correlation Between GOLD ROAD and National Health
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD 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 GOLD ROAD and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and National Health Investors, you can compare the effects of market volatilities on GOLD ROAD 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 GOLD ROAD with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and National Health.
Diversification Opportunities for GOLD ROAD and National Health
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOLD and National is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and National Health go up and down completely randomly.
Pair Corralation between GOLD ROAD and National Health
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.66 times more return on investment than National Health. However, GOLD ROAD RES is 1.5 times less risky than National Health. It trades about 0.61 of its potential returns per unit of risk. National Health Investors is currently generating about -0.02 per unit of risk. If you would invest 122.00 in GOLD ROAD RES on October 19, 2024 and sell it today you would earn a total of 17.00 from holding GOLD ROAD RES or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. National Health Investors
Performance |
| Timeline |
| GOLD ROAD RES |
| National Health Investors |
GOLD ROAD and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and National Health
The main advantage of trading using opposite GOLD ROAD and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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.| GOLD ROAD vs. Alliance Data Systems | GOLD ROAD vs. MOUNT GIBSON IRON | GOLD ROAD vs. Hyrican Informationssysteme Aktiengesellschaft | GOLD ROAD vs. Insteel Industries |
| National Health vs. Liberty Broadband | National Health vs. GOLD ROAD RES | National Health vs. EVS Broadcast Equipment | National Health vs. Samsung Electronics Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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