Correlation Between NIGHTINGALE HEALTH and SBM OFFSHORE

Can any of the company-specific risk be diversified away by investing in both NIGHTINGALE HEALTH and SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE, you can compare the effects of market volatilities on NIGHTINGALE HEALTH and SBM OFFSHORE 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 SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGHTINGALE HEALTH and SBM OFFSHORE.

Diversification Opportunities for NIGHTINGALE HEALTH and SBM OFFSHORE

-0.22

Correlation Coefficient

NIGHTINGALE HEALTH  SBM OFFSHORE

Very good diversification

The 3 months correlation between NIGHTINGALE and SBM is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and SBM OFFSHORE go up and down completely randomly.

Pair Corralation between NIGHTINGALE HEALTH and SBM OFFSHORE

Assuming the 90 days horizon NIGHTINGALE HEALTH is expected to generate 4.52 times less return on investment than SBM OFFSHORE. In addition to that, NIGHTINGALE HEALTH is 1.54 times more volatile than SBM OFFSHORE. It trades about 0.05 of its total potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.33 per unit of volatility. If you would invest  1,665  in SBM OFFSHORE on October 26, 2024 and sell it today you would earn a total of  146.00  from holding SBM OFFSHORE or generate 8.77% return on investment over 90 days.

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

NIGHTINGALE HEALTH EO  vs.  SBM OFFSHORE

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.

SBM OFFSHORE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SBM OFFSHORE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SBM OFFSHORE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NIGHTINGALE HEALTH and SBM OFFSHORE

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

The idea behind NIGHTINGALE HEALTH EO and SBM OFFSHORE 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.