Correlation Between Naturhouse Health and Elaia Investment
Can any of the company-specific risk be diversified away by investing in both Naturhouse Health and Elaia Investment 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 Naturhouse Health and Elaia Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturhouse Health SA and Elaia Investment Spain, you can compare the effects of market volatilities on Naturhouse Health and Elaia Investment 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 Naturhouse Health with a short position of Elaia Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturhouse Health and Elaia Investment.
Diversification Opportunities for Naturhouse Health and Elaia Investment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naturhouse and Elaia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health SA and Elaia Investment Spain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elaia Investment Spain and Naturhouse 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 Naturhouse Health SA are associated (or correlated) with Elaia Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elaia Investment Spain has no effect on the direction of Naturhouse Health i.e., Naturhouse Health and Elaia Investment go up and down completely randomly.
Pair Corralation between Naturhouse Health and Elaia Investment
Assuming the 90 days trading horizon Naturhouse Health SA is expected to generate 0.53 times more return on investment than Elaia Investment. However, Naturhouse Health SA is 1.9 times less risky than Elaia Investment. It trades about 0.05 of its potential returns per unit of risk. Elaia Investment Spain is currently generating about -0.02 per unit of risk. If you would invest 147.00 in Naturhouse Health SA on November 3, 2024 and sell it today you would earn a total of 25.00 from holding Naturhouse Health SA or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naturhouse Health SA vs. Elaia Investment Spain
Performance |
| Timeline |
| Naturhouse Health |
| Elaia Investment Spain |
Naturhouse Health and Elaia Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturhouse Health and Elaia Investment
The main advantage of trading using opposite Naturhouse Health and Elaia Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse Health position performs unexpectedly, Elaia Investment 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 Elaia Investment will offset losses from the drop in Elaia Investment's long position.| Naturhouse Health vs. Caixabank SA | Naturhouse Health vs. Technomeca Aerospace SA | Naturhouse Health vs. Techo Hogar SOCIMI, | Naturhouse Health vs. Millenium Hotels Real |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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