Correlation Between National Health and SPROUTS FARMERS
Can any of the company-specific risk be diversified away by investing in both National Health and SPROUTS FARMERS 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 National Health and SPROUTS FARMERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Health Investors and SPROUTS FARMERS MKT, you can compare the effects of market volatilities on National Health and SPROUTS FARMERS 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 National Health with a short position of SPROUTS FARMERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and SPROUTS FARMERS.
Diversification Opportunities for National Health and SPROUTS FARMERS
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and SPROUTS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and SPROUTS FARMERS MKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPROUTS FARMERS MKT and National 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 National Health Investors are associated (or correlated) with SPROUTS FARMERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPROUTS FARMERS MKT has no effect on the direction of National Health i.e., National Health and SPROUTS FARMERS go up and down completely randomly.
Pair Corralation between National Health and SPROUTS FARMERS
Assuming the 90 days trading horizon National Health is expected to generate 6.66 times less return on investment than SPROUTS FARMERS. In addition to that, National Health is 1.04 times more volatile than SPROUTS FARMERS MKT. It trades about 0.06 of its total potential returns per unit of risk. SPROUTS FARMERS MKT is currently generating about 0.44 per unit of volatility. If you would invest 12,290 in SPROUTS FARMERS MKT on October 31, 2024 and sell it today you would earn a total of 2,295 from holding SPROUTS FARMERS MKT or generate 18.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
National Health Investors vs. SPROUTS FARMERS MKT
Performance |
| Timeline |
| National Health Investors |
| SPROUTS FARMERS MKT |
National Health and SPROUTS FARMERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and SPROUTS FARMERS
The main advantage of trading using opposite National Health and SPROUTS FARMERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, SPROUTS FARMERS 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 SPROUTS FARMERS will offset losses from the drop in SPROUTS FARMERS's long position.| National Health vs. SHIP HEALTHCARE HLDGINC | National Health vs. Perseus Mining Limited | National Health vs. Siemens Healthineers AG | National Health vs. Zijin Mining Group |
| SPROUTS FARMERS vs. Eurasia Mining Plc | SPROUTS FARMERS vs. Harmony Gold Mining | SPROUTS FARMERS vs. MCEWEN MINING INC | SPROUTS FARMERS vs. GameStop Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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