Correlation Between National HealthCare and Pennant
Can any of the company-specific risk be diversified away by investing in both National HealthCare and Pennant 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 National HealthCare and Pennant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National HealthCare and Pennant Group, you can compare the effects of market volatilities on National HealthCare and Pennant 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 National HealthCare with a short position of Pennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of National HealthCare and Pennant.
Diversification Opportunities for National HealthCare and Pennant
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Pennant is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding National HealthCare and Pennant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pennant Group and National HealthCare 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 National HealthCare are associated (or correlated) with Pennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pennant Group has no effect on the direction of National HealthCare i.e., National HealthCare and Pennant go up and down completely randomly.
Pair Corralation between National HealthCare and Pennant
Considering the 90-day investment horizon National HealthCare is expected to generate 0.4 times more return on investment than Pennant. However, National HealthCare is 2.51 times less risky than Pennant. It trades about 0.04 of its potential returns per unit of risk. Pennant Group is currently generating about -0.03 per unit of risk. If you would invest 9,062 in National HealthCare on December 25, 2024 and sell it today you would earn a total of 84.00 from holding National HealthCare or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National HealthCare vs. Pennant Group
Performance |
| Timeline |
| National HealthCare |
| Pennant Group |
National HealthCare and Pennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National HealthCare and Pennant
The main advantage of trading using opposite National HealthCare and Pennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National HealthCare position performs unexpectedly, Pennant 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 Pennant will offset losses from the drop in Pennant's long position.| National HealthCare vs. The Ensign Group | National HealthCare vs. US Physicalrapy | National HealthCare vs. Cass Information Systems | National HealthCare vs. Brookdale Senior Living |
| Pennant vs. Encompass Health Corp | Pennant vs. Acadia Healthcare | Pennant vs. Select Medical Holdings | Pennant vs. Addus HomeCare |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |