Correlation Between National Health and 1847 Holdings

Can any of the company-specific risk be diversified away by investing in both National Health and 1847 Holdings 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 National Health and 1847 Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National Health Scan and 1847 Holdings LLC, you can compare the effects of market volatilities on National Health and 1847 Holdings 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 National Health with a short position of 1847 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and 1847 Holdings.

Diversification Opportunities for National Health and 1847 Holdings

-0.3

Correlation Coefficient

National Health  1847 Holdings

Very good diversification

The 3 months correlation between National and 1847 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding National Health Scan and 1847 Holdings LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1847 Holdings LLC and National 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 National Health Scan are associated (or correlated) with 1847 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1847 Holdings LLC has no effect on the direction of National Health i.e., National Health and 1847 Holdings go up and down completely randomly.

Pair Corralation between National Health and 1847 Holdings

Given the investment horizon of 90 days National Health Scan is expected to generate 0.75 times more return on investment than 1847 Holdings. However, National Health Scan is 1.33 times less risky than 1847 Holdings. It trades about 0.12 of its potential returns per unit of risk. 1847 Holdings LLC is currently generating about -0.06 per unit of risk. If you would invest  1.70  in National Health Scan on September 1, 2024 and sell it today you would earn a total of  0.60  from holding National Health Scan or generate 35.29% return on investment over 90 days.

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

National Health Scan  vs.  1847 Holdings LLC

National Health Scan

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Health Scan are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, National Health reported solid returns over the last few months and may actually be approaching a breakup point.

1847 Holdings LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1847 Holdings LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with National Health and 1847 Holdings

The main advantage of trading using opposite National Health and 1847 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, 1847 Holdings 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 1847 Holdings will offset losses from the drop in 1847 Holdings' long position.

The idea behind National Health Scan and 1847 Holdings LLC 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.