Correlation Between National Health and CEOTRONICS
Can any of the company-specific risk be diversified away by investing in both National Health and CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS, you can compare the effects of market volatilities on National Health and CEOTRONICS 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 CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and CEOTRONICS.
Diversification Opportunities for National Health and CEOTRONICS
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and CEOTRONICS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS 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 CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of National Health i.e., National Health and CEOTRONICS go up and down completely randomly.
Pair Corralation between National Health and CEOTRONICS
Assuming the 90 days trading horizon National Health is expected to generate 4.85 times less return on investment than CEOTRONICS. But when comparing it to its historical volatility, National Health Investors is 1.53 times less risky than CEOTRONICS. It trades about 0.11 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 520.00 in CEOTRONICS on September 4, 2024 and sell it today you would earn a total of 185.00 from holding CEOTRONICS or generate 35.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
National Health Investors vs. CEOTRONICS
Performance |
| Timeline |
| National Health Investors |
| CEOTRONICS |
National Health and CEOTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and CEOTRONICS
The main advantage of trading using opposite National Health and CEOTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, CEOTRONICS 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 CEOTRONICS will offset losses from the drop in CEOTRONICS's long position.| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
| CEOTRONICS vs. Automatic Data Processing | CEOTRONICS vs. PUBLIC STORAGE PRFO | CEOTRONICS vs. SBA Communications Corp | CEOTRONICS vs. COMBA TELECOM SYST |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |