Correlation Between Nightingale Health and Toivo Group
Can any of the company-specific risk be diversified away by investing in both Nightingale Health and Toivo Group 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 Toivo Group 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 Toivo Group Oyj, you can compare the effects of market volatilities on Nightingale Health and Toivo Group 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 Toivo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nightingale Health and Toivo Group.
Diversification Opportunities for Nightingale Health and Toivo Group
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nightingale and Toivo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nightingale Health Oyj and Toivo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toivo Group 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 Toivo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toivo Group Oyj has no effect on the direction of Nightingale Health i.e., Nightingale Health and Toivo Group go up and down completely randomly.
Pair Corralation between Nightingale Health and Toivo Group
Assuming the 90 days trading horizon Nightingale Health Oyj is expected to generate 1.21 times more return on investment than Toivo Group. However, Nightingale Health is 1.21 times more volatile than Toivo Group Oyj. It trades about -0.04 of its potential returns per unit of risk. Toivo Group Oyj is currently generating about -0.27 per unit of risk. If you would invest 304.00 in Nightingale Health Oyj on November 3, 2024 and sell it today you would lose (9.00) from holding Nightingale Health Oyj or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nightingale Health Oyj vs. Toivo Group Oyj
Performance |
| Timeline |
| Nightingale Health Oyj |
| Toivo Group Oyj |
Nightingale Health and Toivo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nightingale Health and Toivo Group
The main advantage of trading using opposite Nightingale Health and Toivo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nightingale Health position performs unexpectedly, Toivo Group 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 Toivo Group will offset losses from the drop in Toivo Group's long position.| Nightingale Health vs. Trainers House Oyj | Nightingale Health vs. Nordea Bank Abp | Nightingale Health vs. Sotkamo Silver AB | Nightingale Health vs. Aiforia Technologies Oyj |
| Toivo Group vs. Detection Technology OY | Toivo Group vs. Alandsbanken Abp B | Toivo Group vs. United Bankers Oyj | Toivo Group vs. Aktia Bank Abp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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