Correlation Between Laureate Education and National Health
Can any of the company-specific risk be diversified away by investing in both Laureate Education 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 Laureate Education and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and National Health Investors, you can compare the effects of market volatilities on Laureate Education 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 Laureate Education with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and National Health.
Diversification Opportunities for Laureate Education and National Health
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Laureate and National is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Laureate Education 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 Laureate Education 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 Investors has no effect on the direction of Laureate Education i.e., Laureate Education and National Health go up and down completely randomly.
Pair Corralation between Laureate Education and National Health
Assuming the 90 days trading horizon Laureate Education is expected to generate 1.2 times more return on investment than National Health. However, Laureate Education is 1.2 times more volatile than National Health Investors. It trades about 0.15 of its potential returns per unit of risk. National Health Investors is currently generating about -0.05 per unit of risk. If you would invest 1,470 in Laureate Education on September 15, 2024 and sell it today you would earn a total of 340.00 from holding Laureate Education or generate 23.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Laureate Education vs. National Health Investors
Performance |
Timeline |
Laureate Education |
National Health Investors |
Laureate Education and National Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laureate Education and National Health
The main advantage of trading using opposite Laureate Education and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education 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.Laureate Education vs. IDP EDUCATION LTD | Laureate Education vs. Superior Plus Corp | Laureate Education vs. SIVERS SEMICONDUCTORS AB | Laureate Education vs. Norsk Hydro ASA |
National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Stocks Directory Find actively traded stocks across global markets | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |