Correlation Between National Health and Waste Management
Can any of the company-specific risk be diversified away by investing in both National Health and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on National Health and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Waste Management.
Diversification Opportunities for National Health and Waste Management
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Waste is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of National Health i.e., National Health and Waste Management go up and down completely randomly.
Pair Corralation between National Health and Waste Management
Assuming the 90 days trading horizon National Health Investors is expected to generate 1.4 times more return on investment than Waste Management. However, National Health is 1.4 times more volatile than Waste Management. It trades about 0.06 of its potential returns per unit of risk. Waste Management is currently generating about 0.07 per unit of risk. If you would invest 4,667 in National Health Investors on September 3, 2024 and sell it today you would earn a total of 2,583 from holding National Health Investors or generate 55.35% 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. Waste Management
Performance |
| Timeline |
| National Health Investors |
| Waste Management |
National Health and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Waste Management
The main advantage of trading using opposite National Health and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
| Waste Management vs. ANTA SPORTS PRODUCT | Waste Management vs. Gaztransport Technigaz SA | Waste Management vs. SCIENCE IN SPORT | Waste Management vs. SPORTING |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |