Correlation Between National Health and HEALTHCARE REAL
Can any of the company-specific risk be diversified away by investing in both National Health and HEALTHCARE REAL 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 HEALTHCARE REAL 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 HEALTHCARE REAL A, you can compare the effects of market volatilities on National Health and HEALTHCARE REAL 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 HEALTHCARE REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and HEALTHCARE REAL.
Diversification Opportunities for National Health and HEALTHCARE REAL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and HEALTHCARE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and HEALTHCARE REAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE REAL 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 HEALTHCARE REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE REAL A has no effect on the direction of National Health i.e., National Health and HEALTHCARE REAL go up and down completely randomly.
Pair Corralation between National Health and HEALTHCARE REAL
Assuming the 90 days trading horizon National Health Investors is expected to generate 0.97 times more return on investment than HEALTHCARE REAL. However, National Health Investors is 1.03 times less risky than HEALTHCARE REAL. It trades about 0.06 of its potential returns per unit of risk. HEALTHCARE REAL A is currently generating about 0.01 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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. HEALTHCARE REAL A
Performance |
| Timeline |
| National Health Investors |
| HEALTHCARE REAL A |
National Health and HEALTHCARE REAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and HEALTHCARE REAL
The main advantage of trading using opposite National Health and HEALTHCARE REAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, HEALTHCARE REAL 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 HEALTHCARE REAL will offset losses from the drop in HEALTHCARE REAL's long position.| National Health vs. Qurate Retail Series | National Health vs. FAST RETAIL ADR | National Health vs. Burlington Stores | National Health vs. Japan Medical Dynamic |
| HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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