Correlation Between National HealthCare and Astrana Health

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

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

Diversification Opportunities for National HealthCare and Astrana Health

0.47

Correlation Coefficient

National HealthCare  Astrana Health

Very weak diversification

The 3 months correlation between National and Astrana is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding National HealthCare and Astrana Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astrana Health 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 Astrana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astrana Health has no effect on the direction of National HealthCare i.e., National HealthCare and Astrana Health go up and down completely randomly.

Pair Corralation between National HealthCare and Astrana Health

If you would invest  3,407  in Astrana Health on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Astrana Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

National HealthCare  vs.  Astrana Health

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 rather sound technical indicators, National HealthCare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Astrana Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astrana Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Astrana Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with National HealthCare and Astrana Health

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

The idea behind National HealthCare and Astrana Health 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.