Correlation Between Natural Health and Overstockcom

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Can any of the company-specific risk be diversified away by investing in both Natural Health and Overstockcom 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 Natural Health and Overstockcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and Overstockcom, you can compare the effects of market volatilities on Natural Health and Overstockcom 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 Natural Health with a short position of Overstockcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Overstockcom.

Diversification Opportunities for Natural Health and Overstockcom

NaturalOverstockcomDiversified AwayNaturalOverstockcomDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Natural and Overstockcom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and Overstockcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstockcom and Natural 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 Natural Health Trend are associated (or correlated) with Overstockcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstockcom has no effect on the direction of Natural Health i.e., Natural Health and Overstockcom go up and down completely randomly.

Pair Corralation between Natural Health and Overstockcom

If you would invest  483.00  in Natural Health Trend on November 25, 2024 and sell it today you would lose (4.00) from holding Natural Health Trend or give up 0.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Natural Health Trend  vs.  Overstockcom

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-50
JavaScript chart by amCharts 3.21.15NHTC OSTK
       Timeline  
Natural Health Trend 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Natural Health Trend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb44.555.5
Overstockcom 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Overstockcom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Overstockcom is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Natural Health and Overstockcom Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.15-3.86-2.56-1.270.01.212.423.644.85 0.010.020.030.04
JavaScript chart by amCharts 3.21.15NHTC OSTK
       Returns  

Pair Trading with Natural Health and Overstockcom

The main advantage of trading using opposite Natural Health and Overstockcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, Overstockcom 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 Overstockcom will offset losses from the drop in Overstockcom's long position.
The idea behind Natural Health Trend and Overstockcom pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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