Correlation Between Universal Health and National Health
Can any of the company-specific risk be diversified away by investing in both Universal Health 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 Universal Health and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Realty and National Health Investors, you can compare the effects of market volatilities on Universal Health 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 Universal Health with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and National Health.
Diversification Opportunities for Universal Health and National Health
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Universal and National is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty 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 Universal Health 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 Universal Health Realty 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 Universal Health i.e., Universal Health and National Health go up and down completely randomly.
Pair Corralation between Universal Health and National Health
Considering the 90-day investment horizon Universal Health Realty is expected to under-perform the National Health. In addition to that, Universal Health is 1.09 times more volatile than National Health Investors. It trades about -0.01 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.07 per unit of volatility. If you would invest 4,977 in National Health Investors on August 27, 2024 and sell it today you would earn a total of 2,794 from holding National Health Investors or generate 56.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. National Health Investors
Performance |
| Timeline |
| Universal Health Realty |
| National Health Investors |
Universal Health and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and National Health
The main advantage of trading using opposite Universal Health and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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.| Universal Health vs. Healthcare Realty Trust | Universal Health vs. Healthpeak Properties | Universal Health vs. Sabra Healthcare REIT | Universal Health vs. Community Healthcare Trust |
| National Health vs. Global Medical REIT | National Health vs. Healthpeak Properties | National Health vs. Ventas Inc | National Health vs. Omega Healthcare Investors |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |