Correlation Between National Health and Lion One
Can any of the company-specific risk be diversified away by investing in both National Health and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on National Health and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Lion One.
Diversification Opportunities for National Health and Lion One
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Lion is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of National Health i.e., National Health and Lion One go up and down completely randomly.
Pair Corralation between National Health and Lion One
Assuming the 90 days trading horizon National Health Investors is expected to generate 0.33 times more return on investment than Lion One. However, National Health Investors is 3.0 times less risky than Lion One. It trades about 0.09 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.05 per unit of risk. If you would invest 4,525 in National Health Investors on September 12, 2024 and sell it today you would earn a total of 2,475 from holding National Health Investors or generate 54.7% 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. Lion One Metals
Performance |
| Timeline |
| National Health Investors |
| Lion One Metals |
National Health and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Lion One
The main advantage of trading using opposite National Health and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| National Health vs. COSTCO WHOLESALE CDR | National Health vs. Titan Machinery | National Health vs. ALEFARM BREWING DK 05 | National Health vs. MARKET VECTR RETAIL |
| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges |