Correlation Between HEALTHSTREAM and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM and NTG Nordic 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 HEALTHSTREAM and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHSTREAM and NTG Nordic Transport, you can compare the effects of market volatilities on HEALTHSTREAM and NTG Nordic 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 HEALTHSTREAM with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM and NTG Nordic.
Diversification Opportunities for HEALTHSTREAM and NTG Nordic
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEALTHSTREAM and NTG is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport and HEALTHSTREAM 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 HEALTHSTREAM are associated (or correlated) with NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of HEALTHSTREAM i.e., HEALTHSTREAM and NTG Nordic go up and down completely randomly.
Pair Corralation between HEALTHSTREAM and NTG Nordic
Assuming the 90 days trading horizon HEALTHSTREAM is expected to generate 0.94 times more return on investment than NTG Nordic. However, HEALTHSTREAM is 1.07 times less risky than NTG Nordic. It trades about -0.03 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.34 per unit of risk. If you would invest 3,120 in HEALTHSTREAM on October 30, 2024 and sell it today you would lose (60.00) from holding HEALTHSTREAM or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEALTHSTREAM vs. NTG Nordic Transport
Performance |
| Timeline |
| HEALTHSTREAM |
| NTG Nordic Transport |
HEALTHSTREAM and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM and NTG Nordic
The main advantage of trading using opposite HEALTHSTREAM and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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