Correlation Between National Health and Norma Group
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By analyzing existing cross correlation between National Health Investors and Norma Group AG, you can compare the effects of market volatilities on National Health and Norma Group 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 Norma Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Norma Group.
Diversification Opportunities for National Health and Norma Group
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Norma is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Norma Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norma Group AG 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 Norma Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norma Group AG has no effect on the direction of National Health i.e., National Health and Norma Group go up and down completely randomly.
Pair Corralation between National Health and Norma Group
Assuming the 90 days trading horizon National Health is expected to generate 2.13 times less return on investment than Norma Group. But when comparing it to its historical volatility, National Health Investors is 1.41 times less risky than Norma Group. It trades about 0.11 of its potential returns per unit of risk. Norma Group AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,266 in Norma Group AG on September 5, 2024 and sell it today you would earn a total of 172.00 from holding Norma Group AG or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Health Investors vs. Norma Group AG
Performance |
| Timeline |
| National Health Investors |
| Norma Group AG |
National Health and Norma Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Norma Group
The main advantage of trading using opposite National Health and Norma Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Norma Group 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 Norma Group will offset losses from the drop in Norma Group's long position.| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
| Norma Group vs. United Rentals | Norma Group vs. GEELY AUTOMOBILE | Norma Group vs. Bumrungrad Hospital Public | Norma Group vs. National Health Investors |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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