Correlation Between National Health and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both National Health and SANOK RUBBER 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 SANOK RUBBER 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 SANOK RUBBER ZY, you can compare the effects of market volatilities on National Health and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and SANOK RUBBER.
Diversification Opportunities for National Health and SANOK RUBBER
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and SANOK is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of National Health i.e., National Health and SANOK RUBBER go up and down completely randomly.
Pair Corralation between National Health and SANOK RUBBER
Assuming the 90 days trading horizon National Health Investors is expected to under-perform the SANOK RUBBER. In addition to that, National Health is 1.05 times more volatile than SANOK RUBBER ZY. It trades about -0.51 of its total potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.25 per unit of volatility. If you would invest 434.00 in SANOK RUBBER ZY on September 22, 2024 and sell it today you would earn a total of 21.00 from holding SANOK RUBBER ZY or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. SANOK RUBBER ZY
Performance |
| Timeline |
| National Health Investors |
| SANOK RUBBER ZY |
National Health and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and SANOK RUBBER
The main advantage of trading using opposite National Health and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| National Health vs. Schweizer Electronic AG | National Health vs. SIDETRADE EO 1 | National Health vs. ARROW ELECTRONICS | National Health vs. American Eagle Outfitters |
| SANOK RUBBER vs. GFL ENVIRONM | SANOK RUBBER vs. Autohome ADR | SANOK RUBBER vs. Focus Home Interactive | SANOK RUBBER vs. Perma Fix Environmental Services |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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