Correlation Between KONE Oyj and Nightingale Health
Can any of the company-specific risk be diversified away by investing in both KONE Oyj 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 KONE Oyj and Nightingale Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Nightingale Health Oyj, you can compare the effects of market volatilities on KONE Oyj 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 KONE Oyj with a short position of Nightingale Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Nightingale Health.
Diversification Opportunities for KONE Oyj and Nightingale Health
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KONE and Nightingale is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding KONE 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 KONE Oyj 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 KONE 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 KONE Oyj i.e., KONE Oyj and Nightingale Health go up and down completely randomly.
Pair Corralation between KONE Oyj and Nightingale Health
Assuming the 90 days trading horizon KONE Oyj is expected to generate 0.54 times more return on investment than Nightingale Health. However, KONE Oyj is 1.84 times less risky than Nightingale Health. It trades about -0.17 of its potential returns per unit of risk. Nightingale Health Oyj is currently generating about -0.29 per unit of risk. If you would invest 5,158 in KONE Oyj on August 27, 2024 and sell it today you would lose (252.00) from holding KONE Oyj or give up 4.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Nightingale Health Oyj
Performance |
| Timeline |
| KONE Oyj |
| Nightingale Health Oyj |
KONE Oyj and Nightingale Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Nightingale Health
The main advantage of trading using opposite KONE Oyj and Nightingale Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj 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.| KONE Oyj vs. Aktia Bank Abp | KONE Oyj vs. Alandsbanken Abp B | KONE Oyj vs. Alandsbanken Abp A | KONE Oyj vs. Sampo Oyj A |
| Nightingale Health vs. Sotkamo Silver AB | Nightingale Health vs. HKFoods Oyj A | Nightingale Health vs. Aiforia Technologies Oyj | Nightingale Health vs. QPR Software 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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