Correlation Between NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP

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

By analyzing existing cross correlation between NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP, you can compare the effects of market volatilities on NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP.

Diversification Opportunities for NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP

-0.04

Correlation Coefficient

NATIONAL HEALTHCARE  TITANIUM TRANSPORTGROUP

Good diversification

The 3 months correlation between NATIONAL and TITANIUM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITANIUM TRANSPORTGROUP has no effect on the direction of NATIONAL HEALTHCARE i.e., NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP go up and down completely randomly.

Pair Corralation between NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP

Assuming the 90 days trading horizon NATIONAL HEALTHCARE is expected to under-perform the TITANIUM TRANSPORTGROUP. But the stock apears to be less risky and, when comparing its historical volatility, NATIONAL HEALTHCARE is 1.07 times less risky than TITANIUM TRANSPORTGROUP. The stock trades about -0.09 of its potential returns per unit of risk. The TITANIUM TRANSPORTGROUP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  144.00  in TITANIUM TRANSPORTGROUP on October 24, 2024 and sell it today you would earn a total of  6.00  from holding TITANIUM TRANSPORTGROUP or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

NATIONAL HEALTHCARE  vs.  TITANIUM TRANSPORTGROUP

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.

TITANIUM TRANSPORTGROUP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TITANIUM TRANSPORTGROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, TITANIUM TRANSPORTGROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP

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

The idea behind NATIONAL HEALTHCARE and TITANIUM TRANSPORTGROUP 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.