Correlation Between National Health and Global Medical
Can any of the company-specific risk be diversified away by investing in both National Health and Global Medical 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 Health and Global Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Health Investors and Global Medical REIT, you can compare the effects of market volatilities on National Health and Global Medical 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 Health with a short position of Global Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Global Medical.
Diversification Opportunities for National Health and Global Medical
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between National and Global is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Global Medical REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Medical REIT and National Health 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 Health Investors are associated (or correlated) with Global Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Medical REIT has no effect on the direction of National Health i.e., National Health and Global Medical go up and down completely randomly.
Pair Corralation between National Health and Global Medical
Considering the 90-day investment horizon National Health Investors is expected to generate about the same return on investment as Global Medical REIT. But, National Health Investors is 1.02 times less risky than Global Medical. It trades about -0.11 of its potential returns per unit of risk. Global Medical REIT is currently generating about -0.11 per unit of risk. If you would invest 874.00 in Global Medical REIT on November 1, 2024 and sell it today you would lose (83.00) from holding Global Medical REIT or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. Global Medical REIT
Performance |
| Timeline |
| National Health Investors |
| Global Medical REIT |
National Health and Global Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Global Medical
The main advantage of trading using opposite National Health and Global Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Global Medical 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 Global Medical will offset losses from the drop in Global Medical's long position.| National Health vs. Global Medical REIT | National Health vs. Healthpeak Properties | National Health vs. Ventas Inc | National Health vs. Omega Healthcare Investors |
| Global Medical vs. Healthpeak Properties | Global Medical vs. Ventas Inc | Global Medical vs. National Health Investors | Global Medical vs. Sabra Healthcare REIT |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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