Correlation Between HeadsUp Entertainment and National Health

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

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

Diversification Opportunities for HeadsUp Entertainment and National Health

0.09

Correlation Coefficient

HeadsUp Entertainment  National Health

Significant diversification

The 3 months correlation between HeadsUp and National is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding HeadsUp Entertainment Internat and National Health Scan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Scan and HeadsUp Entertainment 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 HeadsUp Entertainment International are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Scan has no effect on the direction of HeadsUp Entertainment i.e., HeadsUp Entertainment and National Health go up and down completely randomly.

Pair Corralation between HeadsUp Entertainment and National Health

Given the investment horizon of 90 days HeadsUp Entertainment is expected to generate 15.66 times less return on investment than National Health. But when comparing it to its historical volatility, HeadsUp Entertainment International is 3.88 times less risky than National Health. It trades about 0.02 of its potential returns per unit of risk. National Health Scan is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1.10  in National Health Scan on December 29, 2024 and sell it today you would lose (0.38) from holding National Health Scan or give up 34.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

HeadsUp Entertainment Internat  vs.  National Health Scan

HeadsUp Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HeadsUp Entertainment International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, HeadsUp Entertainment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

National Health Scan

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Health Scan are ranked lower than 6 (%) 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.

Pair Trading with HeadsUp Entertainment and National Health

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

The idea behind HeadsUp Entertainment International and National Health Scan 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.