Correlation Between National Health and Mammoth Energy
Can any of the company-specific risk be diversified away by investing in both National Health and Mammoth Energy 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 Mammoth Energy 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 Mammoth Energy Services, you can compare the effects of market volatilities on National Health and Mammoth Energy 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 Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Mammoth Energy.
Diversification Opportunities for National Health and Mammoth Energy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Mammoth is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding National Health Scan and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services 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 Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of National Health i.e., National Health and Mammoth Energy go up and down completely randomly.
Pair Corralation between National Health and Mammoth Energy
Given the investment horizon of 90 days National Health Scan is expected to generate 6.15 times more return on investment than Mammoth Energy. However, National Health is 6.15 times more volatile than Mammoth Energy Services. It trades about 0.03 of its potential returns per unit of risk. Mammoth Energy Services is currently generating about -0.17 per unit of risk. If you would invest 2.30 in National Health Scan on November 27, 2024 and sell it today you would lose (1.10) from holding National Health Scan or give up 47.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Scan vs. Mammoth Energy Services
Performance |
| Timeline |
| National Health Scan |
| Mammoth Energy Services |
National Health and Mammoth Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Mammoth Energy
The main advantage of trading using opposite National Health and Mammoth Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Mammoth Energy 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 Mammoth Energy will offset losses from the drop in Mammoth Energy'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 |
| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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