Correlation Between Jack Nathan and Life Healthcare
Can any of the company-specific risk be diversified away by investing in both Jack Nathan and Life Healthcare 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 Life Healthcare 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 Life Healthcare Group, you can compare the effects of market volatilities on Jack Nathan and Life Healthcare 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 Life Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Nathan and Life Healthcare.
Diversification Opportunities for Jack Nathan and Life Healthcare
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jack and Life is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jack Nathan Medical and Life Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Healthcare Group 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 Life Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Healthcare Group has no effect on the direction of Jack Nathan i.e., Jack Nathan and Life Healthcare go up and down completely randomly.
Pair Corralation between Jack Nathan and Life Healthcare
Assuming the 90 days horizon Jack Nathan is expected to generate 1.48 times less return on investment than Life Healthcare. In addition to that, Jack Nathan is 3.61 times more volatile than Life Healthcare Group. It trades about 0.01 of its total potential returns per unit of risk. Life Healthcare Group is currently generating about 0.05 per unit of volatility. If you would invest 228.00 in Life Healthcare Group on September 4, 2024 and sell it today you would earn a total of 149.00 from holding Life Healthcare Group or generate 65.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Nathan Medical vs. Life Healthcare Group
Performance |
| Timeline |
| Jack Nathan Medical |
| Life Healthcare Group |
Jack Nathan and Life Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Nathan and Life Healthcare
The main advantage of trading using opposite Jack Nathan and Life Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Nathan position performs unexpectedly, Life Healthcare 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 Life Healthcare will offset losses from the drop in Life Healthcare's long position.| Jack Nathan vs. Pennant Group | Jack Nathan vs. Encompass Health Corp | Jack Nathan vs. Enhabit | Jack Nathan vs. Concord Medical Services |
| Life Healthcare vs. Fresenius SE Co | Life Healthcare vs. Select Medical Holdings | Life Healthcare vs. Ramsay Health Care | Life Healthcare vs. Jack Nathan Medical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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