Correlation Between Scottish American and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Scottish American and Naturhouse 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 Scottish American and Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish American Investment and Naturhouse Health SA, you can compare the effects of market volatilities on Scottish American and Naturhouse 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 Scottish American with a short position of Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish American and Naturhouse Health.
Diversification Opportunities for Scottish American and Naturhouse Health
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scottish and Naturhouse is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Scottish American Investment and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health and Scottish American 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 Scottish American Investment are associated (or correlated) with Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Scottish American i.e., Scottish American and Naturhouse Health go up and down completely randomly.
Pair Corralation between Scottish American and Naturhouse Health
Assuming the 90 days trading horizon Scottish American is expected to generate 2.15 times less return on investment than Naturhouse Health. But when comparing it to its historical volatility, Scottish American Investment is 2.3 times less risky than Naturhouse Health. It trades about 0.03 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 152.00 in Naturhouse Health SA on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Naturhouse Health SA or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.49% |
| Values | Daily Returns |
Scottish American Investment vs. Naturhouse Health SA
Performance |
| Timeline |
| Scottish American |
| Naturhouse Health |
Scottish American and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish American and Naturhouse Health
The main advantage of trading using opposite Scottish American and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish American position performs unexpectedly, Naturhouse 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Scottish American vs. Naturhouse Health SA | Scottish American vs. Molson Coors Beverage | Scottish American vs. Arrow Electronics | Scottish American vs. Abingdon Health Plc |
| Naturhouse Health vs. Hong Kong Land | Naturhouse Health vs. Neometals | Naturhouse Health vs. Coor Service Management | Naturhouse Health vs. Fidelity Sustainable USD |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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