Correlation Between National Health and BROOKFIELD
Can any of the company-specific risk be diversified away by investing in both National Health and BROOKFIELD 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 BROOKFIELD 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 BROOKFIELD P CLA, you can compare the effects of market volatilities on National Health and BROOKFIELD 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 BROOKFIELD. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and BROOKFIELD.
Diversification Opportunities for National Health and BROOKFIELD
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and BROOKFIELD is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and BROOKFIELD P CLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKFIELD P CLA 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 BROOKFIELD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKFIELD P CLA has no effect on the direction of National Health i.e., National Health and BROOKFIELD go up and down completely randomly.
Pair Corralation between National Health and BROOKFIELD
Assuming the 90 days trading horizon National Health Investors is expected to under-perform the BROOKFIELD. But the stock apears to be less risky and, when comparing its historical volatility, National Health Investors is 1.42 times less risky than BROOKFIELD. The stock trades about -0.25 of its potential returns per unit of risk. The BROOKFIELD P CLA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,460 in BROOKFIELD P CLA on September 13, 2024 and sell it today you would earn a total of 180.00 from holding BROOKFIELD P CLA or generate 3.3% 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. BROOKFIELD P CLA
Performance |
| Timeline |
| National Health Investors |
| BROOKFIELD P CLA |
National Health and BROOKFIELD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and BROOKFIELD
The main advantage of trading using opposite National Health and BROOKFIELD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, BROOKFIELD 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 BROOKFIELD will offset losses from the drop in BROOKFIELD's long position.| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
| BROOKFIELD vs. CANASIL RESOURCES | BROOKFIELD vs. Gossan Resources | BROOKFIELD vs. DevEx Resources Limited | BROOKFIELD vs. KTL GLOBAL |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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