Correlation Between Norfolk Southern and Advanced Health
Can any of the company-specific risk be diversified away by investing in both Norfolk Southern and Advanced 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 Norfolk Southern and Advanced Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norfolk Southern and Advanced Health Intelligence, you can compare the effects of market volatilities on Norfolk Southern and Advanced 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 Norfolk Southern with a short position of Advanced Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norfolk Southern and Advanced Health.
Diversification Opportunities for Norfolk Southern and Advanced Health
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norfolk and Advanced is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Norfolk Southern and Advanced Health Intelligence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Health Inte and Norfolk Southern 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 Norfolk Southern are associated (or correlated) with Advanced Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Health Inte has no effect on the direction of Norfolk Southern i.e., Norfolk Southern and Advanced Health go up and down completely randomly.
Pair Corralation between Norfolk Southern and Advanced Health
Considering the 90-day investment horizon Norfolk Southern is expected to generate 0.57 times more return on investment than Advanced Health. However, Norfolk Southern is 1.74 times less risky than Advanced Health. It trades about 0.18 of its potential returns per unit of risk. Advanced Health Intelligence is currently generating about -0.21 per unit of risk. If you would invest 25,222 in Norfolk Southern on August 29, 2024 and sell it today you would earn a total of 2,387 from holding Norfolk Southern or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norfolk Southern vs. Advanced Health Intelligence
Performance |
| Timeline |
| Norfolk Southern |
| Advanced Health Inte |
Norfolk Southern and Advanced Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norfolk Southern and Advanced Health
The main advantage of trading using opposite Norfolk Southern and Advanced Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norfolk Southern position performs unexpectedly, Advanced 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 Advanced Health will offset losses from the drop in Advanced Health's long position.| Norfolk Southern vs. Westinghouse Air Brake | Norfolk Southern vs. Trinity Industries | Norfolk Southern vs. Greenbrier Companies | Norfolk Southern vs. LB Foster |
| Advanced Health vs. Siriuspoint | Advanced Health vs. AmTrust Financial Services | Advanced Health vs. Pintec Technology Holdings | Advanced Health vs. Barings BDC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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