Correlation Between National Health and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both National Health and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on National Health and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and VIVA WINE.
Diversification Opportunities for National Health and VIVA WINE
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and VIVA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of National Health i.e., National Health and VIVA WINE go up and down completely randomly.
Pair Corralation between National Health and VIVA WINE
Assuming the 90 days trading horizon National Health Investors is expected to generate 2.06 times more return on investment than VIVA WINE. However, National Health is 2.06 times more volatile than VIVA WINE GROUP. It trades about 0.12 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about -0.06 per unit of risk. If you would invest 6,900 in National Health Investors on August 27, 2024 and sell it today you would earn a total of 450.00 from holding National Health Investors or generate 6.52% 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. VIVA WINE GROUP
Performance |
| Timeline |
| National Health Investors |
| VIVA WINE GROUP |
National Health and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and VIVA WINE
The main advantage of trading using opposite National Health and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| National Health vs. LG Display Co | National Health vs. Ming Le Sports | National Health vs. USWE SPORTS AB | National Health vs. Gamma Communications plc |
| VIVA WINE vs. National Health Investors | VIVA WINE vs. YOOMA WELLNESS INC | VIVA WINE vs. EHEALTH | VIVA WINE vs. SIDETRADE EO 1 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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