Correlation Between NIGHTINGALE HEALTH and Internet Thailand

Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and Internet Thailand 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 NIGHTINGALE HEALTH and Internet Thailand into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NIGHTINGALE HEALTH EO and Internet Thailand PCL, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and Internet Thailand 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 NIGHTINGALE HEALTH with a short position of Internet Thailand. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and Internet Thailand.

Diversification Opportunities for NIGHTINGALE HEALTH and Internet Thailand

-0.6

Correlation Coefficient

NIGHTINGALE HEALTH  Internet Thailand

Excellent diversification

The 3 months correlation between NIGHTINGALE and Internet is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and Internet Thailand PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand PCL and NIGHTINGALE 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 NIGHTINGALE HEALTH EO are associated (or correlated) with Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand PCL has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and Internet Thailand go up and down completely randomly.

Pair Corralation between NIGHTINGALE HEALTH and Internet Thailand

Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to generate 1.47 times more return on investment than Internet Thailand. However, NIGHTINGALE HEALTH is 1.47 times more volatile than Internet Thailand PCL. It trades about 0.06 of its potential returns per unit of risk. Internet Thailand PCL is currently generating about -0.35 per unit of risk. If you would invest  293.00  in NIGHTINGALE HEALTH EO on October 9, 2024 and sell it today you would earn a total of  7.00  from holding NIGHTINGALE HEALTH EO or generate 2.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

NIGHTINGALE HEALTH EO  vs.  Internet Thailand PCL

NIGHTINGALE HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NIGHTINGALE HEALTH EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NIGHTINGALE HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Internet Thailand PCL

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Thailand PCL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Internet Thailand unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NIGHTINGALE HEALTH and Internet Thailand

The main advantage of trading using opposite NIGHTINGALE HEALTH and Internet Thailand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGHTINGALE HEALTH position performs unexpectedly, Internet Thailand 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 Internet Thailand will offset losses from the drop in Internet Thailand's long position.

The idea behind NIGHTINGALE HEALTH EO and Internet Thailand PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.