Correlation Between Nightingale Health and Sanoma Oyj
Can any of the company-specific risk be diversified away by investing in both Nightingale Health and Sanoma 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 Sanoma 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 Sanoma Oyj, you can compare the effects of market volatilities on Nightingale Health and Sanoma 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 Sanoma Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nightingale Health and Sanoma Oyj.
Diversification Opportunities for Nightingale Health and Sanoma Oyj
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nightingale and Sanoma is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nightingale Health Oyj and Sanoma Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanoma 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 Sanoma Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanoma Oyj has no effect on the direction of Nightingale Health i.e., Nightingale Health and Sanoma Oyj go up and down completely randomly.
Pair Corralation between Nightingale Health and Sanoma Oyj
Assuming the 90 days trading horizon Nightingale Health Oyj is expected to generate 2.19 times more return on investment than Sanoma Oyj. However, Nightingale Health is 2.19 times more volatile than Sanoma Oyj. It trades about 0.07 of its potential returns per unit of risk. Sanoma Oyj is currently generating about -0.01 per unit of risk. If you would invest 106.00 in Nightingale Health Oyj on September 12, 2024 and sell it today you would earn a total of 178.00 from holding Nightingale Health Oyj or generate 167.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nightingale Health Oyj vs. Sanoma Oyj
Performance |
| Timeline |
| Nightingale Health Oyj |
| Sanoma Oyj |
Nightingale Health and Sanoma Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nightingale Health and Sanoma Oyj
The main advantage of trading using opposite Nightingale Health and Sanoma Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nightingale Health position performs unexpectedly, Sanoma 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 Sanoma Oyj will offset losses from the drop in Sanoma Oyj's long position.| Nightingale Health vs. Reka Industrial Oyj | Nightingale Health vs. QPR Software Oyj | Nightingale Health vs. HKFoods Oyj A | Nightingale Health vs. SSH Communications Security |
| Sanoma Oyj vs. QPR Software Oyj | Sanoma Oyj vs. Nordea Bank Abp | Sanoma Oyj vs. SSH Communications Security | Sanoma Oyj vs. Nightingale Health 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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