Correlation Between National Health and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both National Health and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on National Health and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Jacquet Metal.
Diversification Opportunities for National Health and Jacquet Metal
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Jacquet is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of National Health i.e., National Health and Jacquet Metal go up and down completely randomly.
Pair Corralation between National Health and Jacquet Metal
Assuming the 90 days trading horizon National Health Investors is expected to generate 1.05 times more return on investment than Jacquet Metal. However, National Health is 1.05 times more volatile than Jacquet Metal Service. It trades about 0.1 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.04 per unit of risk. If you would invest 5,890 in National Health Investors on September 1, 2024 and sell it today you would earn a total of 1,360 from holding National Health Investors or generate 23.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. Jacquet Metal Service
Performance |
| Timeline |
| National Health Investors |
| Jacquet Metal Service |
National Health and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Jacquet Metal
The main advantage of trading using opposite National Health and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| National Health vs. NTG Nordic Transport | National Health vs. Transport International Holdings | National Health vs. EVS Broadcast Equipment | National Health vs. COPLAND ROAD CAPITAL |
| Jacquet Metal vs. BORR DRILLING NEW | Jacquet Metal vs. Carsales | Jacquet Metal vs. Gruppo Mutuionline SpA | Jacquet Metal vs. GungHo Online Entertainment |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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