Correlation Between Fortum Oyj and Nightingale Health
Can any of the company-specific risk be diversified away by investing in both Fortum Oyj and Nightingale 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 Fortum Oyj and Nightingale Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortum Oyj and Nightingale Health Oyj, you can compare the effects of market volatilities on Fortum Oyj and Nightingale 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 Fortum Oyj with a short position of Nightingale Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortum Oyj and Nightingale Health.
Diversification Opportunities for Fortum Oyj and Nightingale Health
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortum and Nightingale is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fortum Oyj and Nightingale Health Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nightingale Health Oyj and Fortum Oyj 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 Fortum Oyj are associated (or correlated) with Nightingale Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nightingale Health Oyj has no effect on the direction of Fortum Oyj i.e., Fortum Oyj and Nightingale Health go up and down completely randomly.
Pair Corralation between Fortum Oyj and Nightingale Health
Assuming the 90 days trading horizon Fortum Oyj is expected to generate 0.83 times more return on investment than Nightingale Health. However, Fortum Oyj is 1.2 times less risky than Nightingale Health. It trades about 0.01 of its potential returns per unit of risk. Nightingale Health Oyj is currently generating about -0.29 per unit of risk. If you would invest 1,423 in Fortum Oyj on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Fortum Oyj or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortum Oyj vs. Nightingale Health Oyj
Performance |
| Timeline |
| Fortum Oyj |
| Nightingale Health Oyj |
Fortum Oyj and Nightingale Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortum Oyj and Nightingale Health
The main advantage of trading using opposite Fortum Oyj and Nightingale Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortum Oyj position performs unexpectedly, Nightingale 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 Nightingale Health will offset losses from the drop in Nightingale Health's long position.| Fortum Oyj vs. Terveystalo Oy | Fortum Oyj vs. Investors House | Fortum Oyj vs. Fiskars Oyj Abp | Fortum Oyj vs. Tokmanni Group Oyj |
| Nightingale Health vs. Sotkamo Silver AB | Nightingale Health vs. HKFoods Oyj A | Nightingale Health vs. Aiforia Technologies Oyj | Nightingale Health vs. QPR Software Oyj |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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