Correlation Between SSH Communications and Nightingale Health
Can any of the company-specific risk be diversified away by investing in both SSH Communications 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 SSH Communications and Nightingale Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSH Communications Security and Nightingale Health Oyj, you can compare the effects of market volatilities on SSH Communications 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 SSH Communications with a short position of Nightingale Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and Nightingale Health.
Diversification Opportunities for SSH Communications and Nightingale Health
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SSH and Nightingale is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Nightingale Health Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nightingale Health Oyj and SSH Communications 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 SSH Communications Security 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 Oyj has no effect on the direction of SSH Communications i.e., SSH Communications and Nightingale Health go up and down completely randomly.
Pair Corralation between SSH Communications and Nightingale Health
Assuming the 90 days trading horizon SSH Communications Security is expected to under-perform the Nightingale Health. But the stock apears to be less risky and, when comparing its historical volatility, SSH Communications Security is 1.44 times less risky than Nightingale Health. The stock trades about -0.02 of its potential returns per unit of risk. The Nightingale Health Oyj is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Nightingale Health Oyj on August 26, 2024 and sell it today you would earn a total of 162.00 from holding Nightingale Health Oyj or generate 142.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSH Communications Security vs. Nightingale Health Oyj
Performance |
| Timeline |
| SSH Communications |
| Nightingale Health Oyj |
SSH Communications and Nightingale Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSH Communications and Nightingale Health
The main advantage of trading using opposite SSH Communications and Nightingale Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSH Communications 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.| SSH Communications vs. Innofactor Oyj | SSH Communications vs. CapMan Oyj B | SSH Communications vs. HKFoods Oyj A | SSH Communications vs. KONE Oyj |
| Nightingale Health vs. Vaisala Oyj A | Nightingale Health vs. CapMan Oyj B | Nightingale Health vs. HKFoods Oyj A | Nightingale Health vs. KONE Oyj |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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