Correlation Between National Health and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both National Health and BOSTON BEER 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 BOSTON BEER 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 BOSTON BEER A , you can compare the effects of market volatilities on National Health and BOSTON BEER 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 BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and BOSTON BEER.
Diversification Opportunities for National Health and BOSTON BEER
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and BOSTON is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A 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 BOSTON BEER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOSTON BEER A has no effect on the direction of National Health i.e., National Health and BOSTON BEER go up and down completely randomly.
Pair Corralation between National Health and BOSTON BEER
Assuming the 90 days trading horizon National Health Investors is expected to under-perform the BOSTON BEER. In addition to that, National Health is 1.25 times more volatile than BOSTON BEER A . It trades about -0.03 of its total potential returns per unit of risk. BOSTON BEER A is currently generating about 0.09 per unit of volatility. If you would invest 27,200 in BOSTON BEER A on September 27, 2024 and sell it today you would earn a total of 1,560 from holding BOSTON BEER A or generate 5.74% 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. BOSTON BEER A
Performance |
| Timeline |
| National Health Investors |
| BOSTON BEER A |
National Health and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and BOSTON BEER
The main advantage of trading using opposite National Health and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, BOSTON BEER 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 BOSTON BEER will offset losses from the drop in BOSTON BEER's long position.| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
| BOSTON BEER vs. National Health Investors | BOSTON BEER vs. JSC Halyk bank | BOSTON BEER vs. HEALTHCARE REAL A | BOSTON BEER vs. VIRG NATL BANKSH |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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