Correlation Between Rayonier Advanced and National Health
Can any of the company-specific risk be diversified away by investing in both Rayonier Advanced and National 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 Rayonier Advanced and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rayonier Advanced Materials and National Health Investors, you can compare the effects of market volatilities on Rayonier Advanced and National 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 Rayonier Advanced with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rayonier Advanced and National Health.
Diversification Opportunities for Rayonier Advanced and National Health
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rayonier and National is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Rayonier Advanced Materials and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Rayonier Advanced 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 Rayonier Advanced Materials are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Rayonier Advanced i.e., Rayonier Advanced and National Health go up and down completely randomly.
Pair Corralation between Rayonier Advanced and National Health
Assuming the 90 days horizon Rayonier Advanced Materials is expected to under-perform the National Health. In addition to that, Rayonier Advanced is 2.31 times more volatile than National Health Investors. It trades about -0.33 of its total potential returns per unit of risk. National Health Investors is currently generating about -0.51 per unit of volatility. If you would invest 7,350 in National Health Investors on September 22, 2024 and sell it today you would lose (750.00) from holding National Health Investors or give up 10.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rayonier Advanced Materials vs. National Health Investors
Performance |
| Timeline |
| Rayonier Advanced |
| National Health Investors |
Rayonier Advanced and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rayonier Advanced and National Health
The main advantage of trading using opposite Rayonier Advanced and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rayonier Advanced position performs unexpectedly, National 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 National Health will offset losses from the drop in National Health's long position.| Rayonier Advanced vs. Air Liquide SA | Rayonier Advanced vs. AIR LIQUIDE ADR | Rayonier Advanced vs. Air Products and | Rayonier Advanced vs. Shin Etsu Chemical Co |
| National Health vs. Schweizer Electronic AG | National Health vs. SIDETRADE EO 1 | National Health vs. ARROW ELECTRONICS | National Health vs. American Eagle Outfitters |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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