Correlation Between National Health and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both National Health and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on National Health and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Evolution Mining.
Diversification Opportunities for National Health and Evolution Mining
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Evolution is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of National Health i.e., National Health and Evolution Mining go up and down completely randomly.
Pair Corralation between National Health and Evolution Mining
Assuming the 90 days trading horizon National Health is expected to generate 1.4 times less return on investment than Evolution Mining. But when comparing it to its historical volatility, National Health Investors is 1.4 times less risky than Evolution Mining. It trades about 0.1 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 228.00 in Evolution Mining Limited on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Evolution Mining Limited or generate 32.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. Evolution Mining Limited
Performance |
| Timeline |
| National Health Investors |
| Evolution Mining |
National Health and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Evolution Mining
The main advantage of trading using opposite National Health and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| National Health vs. NTG Nordic Transport | National Health vs. Transport International Holdings | National Health vs. EVS Broadcast Equipment | National Health vs. COPLAND ROAD CAPITAL |
| Evolution Mining vs. Mitsubishi Gas Chemical | Evolution Mining vs. Shin Etsu Chemical Co | Evolution Mining vs. Siamgas And Petrochemicals | Evolution Mining vs. Tyson Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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