Correlation Between National Health and Fiskars Oyj
Can any of the company-specific risk be diversified away by investing in both National Health and Fiskars Oyj 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 Fiskars Oyj 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 Fiskars Oyj Abp, you can compare the effects of market volatilities on National Health and Fiskars Oyj 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 Fiskars Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Fiskars Oyj.
Diversification Opportunities for National Health and Fiskars Oyj
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and Fiskars is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Fiskars Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiskars Oyj Abp 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 Fiskars Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiskars Oyj Abp has no effect on the direction of National Health i.e., National Health and Fiskars Oyj go up and down completely randomly.
Pair Corralation between National Health and Fiskars Oyj
Assuming the 90 days trading horizon National Health Investors is expected to generate 1.01 times more return on investment than Fiskars Oyj. However, National Health is 1.01 times more volatile than Fiskars Oyj Abp. It trades about 0.07 of its potential returns per unit of risk. Fiskars Oyj Abp is currently generating about 0.01 per unit of risk. If you would invest 4,536 in National Health Investors on September 4, 2024 and sell it today you would earn a total of 2,714 from holding National Health Investors or generate 59.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
National Health Investors vs. Fiskars Oyj Abp
Performance |
| Timeline |
| National Health Investors |
| Fiskars Oyj Abp |
National Health and Fiskars Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Fiskars Oyj
The main advantage of trading using opposite National Health and Fiskars Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Fiskars Oyj 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 Fiskars Oyj will offset losses from the drop in Fiskars Oyj's long position.| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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