Correlation Between NIGHTINGALE HEALTH and American Shipping

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

Diversification Opportunities for NIGHTINGALE HEALTH and American Shipping

0.35

Correlation Coefficient

NIGHTINGALE HEALTH  American Shipping

Weak diversification

The 3 months correlation between NIGHTINGALE and American is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping 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 American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and American Shipping go up and down completely randomly.

Pair Corralation between NIGHTINGALE HEALTH and American Shipping

Assuming the 90 days horizon NIGHTINGALE HEALTH is expected to generate 1.02 times less return on investment than American Shipping. In addition to that, NIGHTINGALE HEALTH is 1.51 times more volatile than American Shipping. It trades about 0.13 of its total potential returns per unit of risk. American Shipping is currently generating about 0.19 per unit of volatility. If you would invest  191.00  in American Shipping on December 24, 2024 and sell it today you would earn a total of  60.00  from holding American Shipping or generate 31.41% return on investment over 90 days.

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

NIGHTINGALE HEALTH EO  vs.  American Shipping

NIGHTINGALE HEALTH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NIGHTINGALE HEALTH EO are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NIGHTINGALE HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

American Shipping

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Shipping are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, American Shipping reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NIGHTINGALE HEALTH and American Shipping

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

The idea behind NIGHTINGALE HEALTH EO and American Shipping 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.