Correlation Between Steel Partners and National Health
Can any of the company-specific risk be diversified away by investing in both Steel Partners 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 Steel Partners and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Partners Holdings and National Health Scan, you can compare the effects of market volatilities on Steel Partners 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 Steel Partners with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Partners and National Health.
Diversification Opportunities for Steel Partners and National Health
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Steel and National is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Steel Partners Holdings and National Health Scan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Scan and Steel Partners 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 Steel Partners Holdings 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 Scan has no effect on the direction of Steel Partners i.e., Steel Partners and National Health go up and down completely randomly.
Pair Corralation between Steel Partners and National Health
Given the investment horizon of 90 days Steel Partners is expected to generate 6.58 times less return on investment than National Health. But when comparing it to its historical volatility, Steel Partners Holdings is 11.65 times less risky than National Health. It trades about 0.09 of its potential returns per unit of risk. National Health Scan is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.80 in National Health Scan on November 27, 2024 and sell it today you would lose (0.60) from holding National Health Scan or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Partners Holdings vs. National Health Scan
Performance |
| Timeline |
| Steel Partners Holdings |
| National Health Scan |
Steel Partners and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Partners and National Health
The main advantage of trading using opposite Steel Partners and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Partners 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.| Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Tejon Ranch Co |
| National Health vs. Emergent Health Corp | National Health vs. One World Universe | National Health vs. Nextmart | National Health vs. HeadsUp Entertainment International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |