Correlation Between NATIONAL HEALTHCARE and COPLAND ROAD

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

By analyzing existing cross correlation between NATIONAL HEALTHCARE and COPLAND ROAD CAPITAL, you can compare the effects of market volatilities on NATIONAL HEALTHCARE and COPLAND ROAD 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 HEALTHCARE with a short position of COPLAND ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL HEALTHCARE and COPLAND ROAD.

Diversification Opportunities for NATIONAL HEALTHCARE and COPLAND ROAD

-0.81

Correlation Coefficient

NATIONAL HEALTHCARE  COPLAND ROAD

Pay attention - limited upside

The 3 months correlation between NATIONAL and COPLAND is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL HEALTHCARE and COPLAND ROAD CAPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPLAND ROAD CAPITAL and NATIONAL HEALTHCARE 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 HEALTHCARE are associated (or correlated) with COPLAND ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPLAND ROAD CAPITAL has no effect on the direction of NATIONAL HEALTHCARE i.e., NATIONAL HEALTHCARE and COPLAND ROAD go up and down completely randomly.

Pair Corralation between NATIONAL HEALTHCARE and COPLAND ROAD

Assuming the 90 days trading horizon NATIONAL HEALTHCARE is expected to generate 16.32 times less return on investment than COPLAND ROAD. But when comparing it to its historical volatility, NATIONAL HEALTHCARE is 25.36 times less risky than COPLAND ROAD. It trades about 0.08 of its potential returns per unit of risk. COPLAND ROAD CAPITAL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  15.00  in COPLAND ROAD CAPITAL on October 24, 2024 and sell it today you would earn a total of  5,445  from holding COPLAND ROAD CAPITAL or generate 36300.0% return on investment over 90 days.

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

NATIONAL HEALTHCARE  vs.  COPLAND ROAD CAPITAL

NATIONAL HEALTHCARE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NATIONAL HEALTHCARE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

COPLAND ROAD CAPITAL

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COPLAND ROAD CAPITAL are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COPLAND ROAD reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NATIONAL HEALTHCARE and COPLAND ROAD

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

The idea behind NATIONAL HEALTHCARE and COPLAND ROAD CAPITAL 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.