Correlation Between Jack Nathan and American Shared
Can any of the company-specific risk be diversified away by investing in both Jack Nathan and American Shared 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 Jack Nathan and American Shared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jack Nathan Medical and American Shared Hospital, you can compare the effects of market volatilities on Jack Nathan and American Shared 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 Jack Nathan with a short position of American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Nathan and American Shared.
Diversification Opportunities for Jack Nathan and American Shared
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jack and American is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jack Nathan Medical and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital and Jack Nathan 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 Jack Nathan Medical are associated (or correlated) with American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of Jack Nathan i.e., Jack Nathan and American Shared go up and down completely randomly.
Pair Corralation between Jack Nathan and American Shared
Assuming the 90 days horizon Jack Nathan Medical is expected to under-perform the American Shared. In addition to that, Jack Nathan is 5.13 times more volatile than American Shared Hospital. It trades about -0.21 of its total potential returns per unit of risk. American Shared Hospital is currently generating about -0.02 per unit of volatility. If you would invest 284.00 in American Shared Hospital on January 12, 2025 and sell it today you would lose (6.00) from holding American Shared Hospital or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Nathan Medical vs. American Shared Hospital
Performance |
| Timeline |
| Jack Nathan Medical |
| American Shared Hospital |
Jack Nathan and American Shared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Nathan and American Shared
The main advantage of trading using opposite Jack Nathan and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Nathan position performs unexpectedly, American Shared 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 American Shared will offset losses from the drop in American Shared's long position.| Jack Nathan vs. Medical Facilities | Jack Nathan vs. Fresenius SE Co | Jack Nathan vs. Ramsay Health Care | Jack Nathan vs. Nova Leap Health |
| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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