Correlation Between BROADPEAK and NIGHTINGALE HEALTH
Can any of the company-specific risk be diversified away by investing in both BROADPEAK and NIGHTINGALE HEALTH 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 BROADPEAK and NIGHTINGALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADPEAK SA EO and NIGHTINGALE HEALTH EO, you can compare the effects of market volatilities on BROADPEAK and NIGHTINGALE HEALTH 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 BROADPEAK with a short position of NIGHTINGALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADPEAK and NIGHTINGALE HEALTH.
Diversification Opportunities for BROADPEAK and NIGHTINGALE HEALTH
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BROADPEAK and NIGHTINGALE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BROADPEAK SA EO and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH and BROADPEAK 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 BROADPEAK SA EO are associated (or correlated) with NIGHTINGALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGHTINGALE HEALTH has no effect on the direction of BROADPEAK i.e., BROADPEAK and NIGHTINGALE HEALTH go up and down completely randomly.
Pair Corralation between BROADPEAK and NIGHTINGALE HEALTH
Assuming the 90 days horizon BROADPEAK SA EO is expected to under-perform the NIGHTINGALE HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, BROADPEAK SA EO is 1.74 times less risky than NIGHTINGALE HEALTH. The stock trades about -0.07 of its potential returns per unit of risk. The NIGHTINGALE HEALTH EO is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 295.00 in NIGHTINGALE HEALTH EO on October 30, 2024 and sell it today you would earn a total of 2.00 from holding NIGHTINGALE HEALTH EO or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADPEAK SA EO vs. NIGHTINGALE HEALTH EO
Performance |
| Timeline |
| BROADPEAK SA EO |
| NIGHTINGALE HEALTH |
BROADPEAK and NIGHTINGALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADPEAK and NIGHTINGALE HEALTH
The main advantage of trading using opposite BROADPEAK and NIGHTINGALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADPEAK position performs unexpectedly, NIGHTINGALE HEALTH 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 NIGHTINGALE HEALTH will offset losses from the drop in NIGHTINGALE HEALTH's long position.| BROADPEAK vs. CHIBA BANK | BROADPEAK vs. Virtu Financial | BROADPEAK vs. Fevertree Drinks PLC | BROADPEAK vs. Synchrony Financial |
| NIGHTINGALE HEALTH vs. NH HOTEL GROUP | NIGHTINGALE HEALTH vs. SCIENCE IN SPORT | NIGHTINGALE HEALTH vs. BII Railway Transportation | NIGHTINGALE HEALTH vs. Pebblebrook Hotel Trust |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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