Correlation Between Charter Communications and NIGHTINGALE HEALTH

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

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

Diversification Opportunities for Charter Communications and NIGHTINGALE HEALTH

-0.33

Correlation Coefficient

Charter Communications  NIGHTINGALE HEALTH

Very good diversification

The 3 months correlation between Charter and NIGHTINGALE is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH and Charter Communications 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 Charter Communications are associated (or correlated) with NIGHTINGALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGHTINGALE HEALTH has no effect on the direction of Charter Communications i.e., Charter Communications and NIGHTINGALE HEALTH go up and down completely randomly.

Pair Corralation between Charter Communications and NIGHTINGALE HEALTH

Assuming the 90 days trading horizon Charter Communications is expected to generate 278.88 times less return on investment than NIGHTINGALE HEALTH. But when comparing it to its historical volatility, Charter Communications is 2.29 times less risky than NIGHTINGALE HEALTH. It trades about 0.0 of its potential returns per unit of risk. NIGHTINGALE HEALTH EO is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  269.00  in NIGHTINGALE HEALTH EO on December 24, 2024 and sell it today you would earn a total of  74.00  from holding NIGHTINGALE HEALTH EO or generate 27.51% return on investment over 90 days.

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

Charter Communications  vs.  NIGHTINGALE HEALTH EO

Charter Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Charter Communications is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Charter Communications and NIGHTINGALE HEALTH

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

The idea behind Charter Communications and NIGHTINGALE HEALTH EO 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.