Correlation Between National Health and Emergent Health
Can any of the company-specific risk be diversified away by investing in both National Health and Emergent 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 National Health and Emergent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Health Scan and Emergent Health Corp, you can compare the effects of market volatilities on National Health and Emergent 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 National Health with a short position of Emergent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Emergent Health.
Diversification Opportunities for National Health and Emergent Health
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Emergent is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding National Health Scan and Emergent Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Health Corp and National Health 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 National Health Scan are associated (or correlated) with Emergent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Health Corp has no effect on the direction of National Health i.e., National Health and Emergent Health go up and down completely randomly.
Pair Corralation between National Health and Emergent Health
Given the investment horizon of 90 days National Health Scan is expected to generate 3.71 times more return on investment than Emergent Health. However, National Health is 3.71 times more volatile than Emergent Health Corp. It trades about 0.09 of its potential returns per unit of risk. Emergent Health Corp is currently generating about -0.12 per unit of risk. If you would invest 2.50 in National Health Scan on August 29, 2024 and sell it today you would lose (0.22) from holding National Health Scan or give up 8.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Health Scan vs. Emergent Health Corp
Performance |
| Timeline |
| National Health Scan |
| Emergent Health Corp |
National Health and Emergent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Emergent Health
The main advantage of trading using opposite National Health and Emergent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Emergent 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 Emergent Health will offset losses from the drop in Emergent Health's long position.| National Health vs. Emergent Health Corp | National Health vs. One World Universe | National Health vs. Nextmart | National Health vs. HeadsUp Entertainment International |
| Emergent Health vs. Galexxy Holdings | Emergent Health vs. Integrated Cannabis Solutions | Emergent Health vs. Golden Developing Solutions | Emergent Health vs. Premier Biomedical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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