Correlation Between Penn National and NIGHTINGALE HEALTH
Can any of the company-specific risk be diversified away by investing in both Penn National 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 Penn National and NIGHTINGALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and NIGHTINGALE HEALTH EO, you can compare the effects of market volatilities on Penn National 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 Penn National with a short position of NIGHTINGALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and NIGHTINGALE HEALTH.
Diversification Opportunities for Penn National and NIGHTINGALE HEALTH
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penn and NIGHTINGALE is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH and Penn National 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 Penn National Gaming 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 Penn National i.e., Penn National and NIGHTINGALE HEALTH go up and down completely randomly.
Pair Corralation between Penn National and NIGHTINGALE HEALTH
Assuming the 90 days horizon Penn National is expected to generate 233.28 times less return on investment than NIGHTINGALE HEALTH. But when comparing it to its historical volatility, Penn National Gaming is 1.25 times less risky than NIGHTINGALE HEALTH. It trades about 0.0 of its potential returns per unit of risk. NIGHTINGALE HEALTH EO is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 123.00 in NIGHTINGALE HEALTH EO on October 30, 2024 and sell it today you would earn a total of 174.00 from holding NIGHTINGALE HEALTH EO or generate 141.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Penn National Gaming vs. NIGHTINGALE HEALTH EO
Performance |
Timeline |
Penn National Gaming |
NIGHTINGALE HEALTH |
Penn National and NIGHTINGALE HEALTH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penn National and NIGHTINGALE HEALTH
The main advantage of trading using opposite Penn National and NIGHTINGALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National 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.Penn National vs. TFS FINANCIAL | ||
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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