Correlation Between National Health and PLAY2CHILL

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Can any of the company-specific risk be diversified away by investing in both National Health and PLAY2CHILL 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 PLAY2CHILL 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 PLAY2CHILL SA ZY, you can compare the effects of market volatilities on National Health and PLAY2CHILL 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 PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and PLAY2CHILL.

Diversification Opportunities for National Health and PLAY2CHILL

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between National and PLAY2CHILL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA 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 PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of National Health i.e., National Health and PLAY2CHILL go up and down completely randomly.

Pair Corralation between National Health and PLAY2CHILL

Assuming the 90 days trading horizon National Health Investors is expected to generate 0.57 times more return on investment than PLAY2CHILL. However, National Health Investors is 1.76 times less risky than PLAY2CHILL. It trades about 0.06 of its potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about 0.0 per unit of risk. If you would invest  4,667  in National Health Investors on August 24, 2024 and sell it today you would earn a total of  2,533  from holding National Health Investors or generate 54.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

National Health Investors  vs.  PLAY2CHILL SA ZY

 Performance 
       Timeline  
National Health Investors 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in National Health Investors are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, National Health is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
PLAY2CHILL SA ZY 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PLAY2CHILL SA ZY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PLAY2CHILL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

National Health and PLAY2CHILL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with National Health and PLAY2CHILL

The main advantage of trading using opposite National Health and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.
The idea behind National Health Investors and PLAY2CHILL SA ZY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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