Correlation Between INSURANCE AUST and NIGHTINGALE HEALTH
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST 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 INSURANCE AUST and NIGHTINGALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and NIGHTINGALE HEALTH EO, you can compare the effects of market volatilities on INSURANCE AUST 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 INSURANCE AUST with a short position of NIGHTINGALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and NIGHTINGALE HEALTH.
Diversification Opportunities for INSURANCE AUST and NIGHTINGALE HEALTH
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INSURANCE and NIGHTINGALE is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH and INSURANCE AUST 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 INSURANCE AUST GRP 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 has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and NIGHTINGALE HEALTH go up and down completely randomly.
Pair Corralation between INSURANCE AUST and NIGHTINGALE HEALTH
Assuming the 90 days trading horizon INSURANCE AUST is expected to generate 1.62 times less return on investment than NIGHTINGALE HEALTH. But when comparing it to its historical volatility, INSURANCE AUST GRP is 2.47 times less risky than NIGHTINGALE HEALTH. It trades about 0.22 of its potential returns per unit of risk. NIGHTINGALE HEALTH EO is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 276.00 in NIGHTINGALE HEALTH EO on October 29, 2024 and sell it today you would earn a total of 21.00 from holding NIGHTINGALE HEALTH EO or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. NIGHTINGALE HEALTH EO
Performance |
| Timeline |
| INSURANCE AUST GRP |
| NIGHTINGALE HEALTH |
INSURANCE AUST and NIGHTINGALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and NIGHTINGALE HEALTH
The main advantage of trading using opposite INSURANCE AUST and NIGHTINGALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST 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.| INSURANCE AUST vs. Canon Marketing Japan | INSURANCE AUST vs. CANON MARKETING JP | INSURANCE AUST vs. Tradeweb Markets | INSURANCE AUST vs. DICKS Sporting Goods |
| NIGHTINGALE HEALTH vs. Synovus Financial Corp | NIGHTINGALE HEALTH vs. Ameriprise Financial | NIGHTINGALE HEALTH vs. Virtu Financial | NIGHTINGALE HEALTH vs. X FAB Silicon Foundries |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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