Correlation Between KH Group and Nightingale Health
Can any of the company-specific risk be diversified away by investing in both KH Group 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 KH Group and Nightingale Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KH Group Oyj and Nightingale Health Oyj, you can compare the effects of market volatilities on KH Group 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 KH Group with a short position of Nightingale Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of KH Group and Nightingale Health.
Diversification Opportunities for KH Group and Nightingale Health
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between KHG and Nightingale is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding KH Group Oyj and Nightingale Health Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nightingale Health Oyj and KH Group 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 KH Group Oyj 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 Oyj has no effect on the direction of KH Group i.e., KH Group and Nightingale Health go up and down completely randomly.
Pair Corralation between KH Group and Nightingale Health
Assuming the 90 days trading horizon KH Group Oyj is expected to generate 25.68 times more return on investment than Nightingale Health. However, KH Group is 25.68 times more volatile than Nightingale Health Oyj. It trades about 0.1 of its potential returns per unit of risk. Nightingale Health Oyj is currently generating about 0.09 per unit of risk. If you would invest 105.00 in KH Group Oyj on September 2, 2024 and sell it today you would earn a total of 9,982 from holding KH Group Oyj or generate 9506.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.69% |
| Values | Daily Returns |
KH Group Oyj vs. Nightingale Health Oyj
Performance |
| Timeline |
| KH Group Oyj |
| Nightingale Health Oyj |
KH Group and Nightingale Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KH Group and Nightingale Health
The main advantage of trading using opposite KH Group and Nightingale Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KH Group 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.| KH Group vs. Sotkamo Silver AB | KH Group vs. Reka Industrial Oyj | KH Group vs. SSH Communications Security | KH Group vs. Detection Technology OY |
| Nightingale Health vs. Nokian Renkaat Oyj | Nightingale Health vs. CapMan Oyj B | Nightingale Health vs. HKFoods Oyj A | Nightingale Health vs. KONE Oyj |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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