Correlation Between National Health and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both National Health and CENTURIA OFFICE 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT, you can compare the effects of market volatilities on National Health and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and CENTURIA OFFICE.
Diversification Opportunities for National Health and CENTURIA OFFICE
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and CENTURIA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of National Health i.e., National Health and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between National Health and CENTURIA OFFICE
Assuming the 90 days trading horizon National Health Investors is expected to under-perform the CENTURIA OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, National Health Investors is 1.7 times less risky than CENTURIA OFFICE. The stock trades about -0.02 of its potential returns per unit of risk. The CENTURIA OFFICE REIT is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 63.00 in CENTURIA OFFICE REIT on October 19, 2024 and sell it today you would earn a total of 2.00 from holding CENTURIA OFFICE REIT or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| National Health Investors |
| CENTURIA OFFICE REIT |
National Health and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and CENTURIA OFFICE
The main advantage of trading using opposite National Health and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| National Health vs. Q2M Managementberatung AG | National Health vs. Platinum Investment Management | National Health vs. Cleanaway Waste Management | National Health vs. Gaming and Leisure |
| CENTURIA OFFICE vs. Osisko Metals | CENTURIA OFFICE vs. National Health Investors | CENTURIA OFFICE vs. Transport International Holdings | CENTURIA OFFICE vs. ARDAGH METAL PACDL 0001 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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