Correlation Between Castellum and NMC Health

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

By analyzing existing cross correlation between Castellum and NMC Health PLC, you can compare the effects of market volatilities on Castellum and NMC 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 Castellum with a short position of NMC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellum and NMC Health.

Diversification Opportunities for Castellum and NMC Health

-0.82

Correlation Coefficient

Castellum  NMC Health

Pay attention - limited upside

The 3 months correlation between Castellum and NMC is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Castellum and NMC Health PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMC Health PLC and Castellum 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 Castellum are associated (or correlated) with NMC Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMC Health PLC has no effect on the direction of Castellum i.e., Castellum and NMC Health go up and down completely randomly.

Pair Corralation between Castellum and NMC Health

If you would invest  31.00  in Castellum on October 4, 2024 and sell it today you would earn a total of  146.00  from holding Castellum or generate 470.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.3%
Values	Daily Returns

Castellum  vs.  NMC Health PLC

Castellum

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Castellum are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Castellum displayed solid returns over the last few months and may actually be approaching a breakup point.

NMC Health PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NMC Health PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, NMC Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Castellum and NMC Health

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

The idea behind Castellum and NMC Health PLC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.