Correlation Between National Health and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both National Health and Schibsted ASA 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 Schibsted ASA 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 Schibsted ASA A, you can compare the effects of market volatilities on National Health and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Schibsted ASA.
Diversification Opportunities for National Health and Schibsted ASA
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Schibsted is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Schibsted ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA A 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA A has no effect on the direction of National Health i.e., National Health and Schibsted ASA go up and down completely randomly.
Pair Corralation between National Health and Schibsted ASA
Assuming the 90 days trading horizon National Health is expected to generate 2.44 times less return on investment than Schibsted ASA. But when comparing it to its historical volatility, National Health Investors is 2.33 times less risky than Schibsted ASA. It trades about 0.1 of its potential returns per unit of risk. Schibsted ASA A is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,301 in Schibsted ASA A on September 15, 2024 and sell it today you would earn a total of 1,903 from holding Schibsted ASA A or generate 146.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
National Health Investors vs. Schibsted ASA A
Performance |
| Timeline |
| National Health Investors |
| Schibsted ASA A |
National Health and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Schibsted ASA
The main advantage of trading using opposite National Health and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
| Schibsted ASA vs. National Health Investors | Schibsted ASA vs. EHEALTH | Schibsted ASA vs. Ultra Clean Holdings | Schibsted ASA vs. New Residential Investment |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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