Correlation Between NorthWest Healthcare and A W

Can any of the company-specific risk be diversified away by investing in both NorthWest Healthcare and A W 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 NorthWest Healthcare and A W into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NorthWest Healthcare Properties and A W FOOD, you can compare the effects of market volatilities on NorthWest Healthcare and A W 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 NorthWest Healthcare with a short position of A W. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorthWest Healthcare and A W.

Diversification Opportunities for NorthWest Healthcare and A W

-0.11

Correlation Coefficient

NorthWest Healthcare  A W

Good diversification

The 3 months correlation between NorthWest and A W is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NorthWest Healthcare Propertie and A W FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A W FOOD and NorthWest 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 NorthWest Healthcare Properties are associated (or correlated) with A W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A W FOOD has no effect on the direction of NorthWest Healthcare i.e., NorthWest Healthcare and A W go up and down completely randomly.

Pair Corralation between NorthWest Healthcare and A W

Assuming the 90 days trading horizon NorthWest Healthcare Properties is expected to generate 1.29 times more return on investment than A W. However, NorthWest Healthcare is 1.29 times more volatile than A W FOOD. It trades about -0.05 of its potential returns per unit of risk. A W FOOD is currently generating about -0.13 per unit of risk. If you would invest  805.00  in NorthWest Healthcare Properties on September 21, 2024 and sell it today you would lose (360.00) from holding NorthWest Healthcare Properties or give up 44.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	9.07%
Values	Daily Returns

NorthWest Healthcare Propertie  vs.  A W FOOD

NorthWest Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NorthWest Healthcare Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

A W FOOD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A W FOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with NorthWest Healthcare and A W

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

The idea behind NorthWest Healthcare Properties and A W FOOD 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..