Correlation Between Nightingale Health and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both Nightingale Health and Fortum Oyj 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 Nightingale Health and Fortum Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nightingale Health Oyj and Fortum Oyj, you can compare the effects of market volatilities on Nightingale Health and Fortum Oyj 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 Nightingale Health with a short position of Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nightingale Health and Fortum Oyj.
Diversification Opportunities for Nightingale Health and Fortum Oyj
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nightingale and Fortum is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nightingale Health Oyj and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj and Nightingale 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 Nightingale Health Oyj are associated (or correlated) with Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj has no effect on the direction of Nightingale Health i.e., Nightingale Health and Fortum Oyj go up and down completely randomly.
Pair Corralation between Nightingale Health and Fortum Oyj
Assuming the 90 days trading horizon Nightingale Health Oyj is expected to under-perform the Fortum Oyj. In addition to that, Nightingale Health is 2.96 times more volatile than Fortum Oyj. It trades about -0.08 of its total potential returns per unit of risk. Fortum Oyj is currently generating about 0.03 per unit of volatility. If you would invest 1,398 in Fortum Oyj on September 2, 2024 and sell it today you would earn a total of 29.00 from holding Fortum Oyj or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nightingale Health Oyj vs. Fortum Oyj
Performance |
| Timeline |
| Nightingale Health Oyj |
| Fortum Oyj |
Nightingale Health and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nightingale Health and Fortum Oyj
The main advantage of trading using opposite Nightingale Health and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nightingale Health position performs unexpectedly, Fortum Oyj 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 Fortum Oyj will offset losses from the drop in Fortum Oyj's long position.| Nightingale Health vs. Nokian Renkaat Oyj | Nightingale Health vs. CapMan Oyj B | Nightingale Health vs. EcoUp Oyj | Nightingale Health vs. HKFoods Oyj A |
| Fortum Oyj vs. Rush Factory Oyj | Fortum Oyj vs. Purmo Group Oyj | Fortum Oyj vs. Boreo Oyj | Fortum Oyj vs. Metsa Board 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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