Correlation Between Titanium Oyj and Nightingale Health

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

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

Diversification Opportunities for Titanium Oyj and Nightingale Health

0.33

Correlation Coefficient

Titanium Oyj  Nightingale Health

Weak diversification

The 3 months correlation between Titanium and Nightingale is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Titanium Oyj and Nightingale Health Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nightingale Health Oyj and Titanium Oyj 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 Titanium Oyj are associated (or correlated) with Nightingale Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nightingale Health Oyj has no effect on the direction of Titanium Oyj i.e., Titanium Oyj and Nightingale Health go up and down completely randomly.

Pair Corralation between Titanium Oyj and Nightingale Health

Assuming the 90 days trading horizon Titanium Oyj is expected to generate 0.34 times more return on investment than Nightingale Health. However, Titanium Oyj is 2.97 times less risky than Nightingale Health. It trades about -0.01 of its potential returns per unit of risk. Nightingale Health Oyj is currently generating about -0.04 per unit of risk. If you would invest  1,035  in Titanium Oyj on September 4, 2024 and sell it today you would lose (20.00) from holding Titanium Oyj or give up 1.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Titanium Oyj  vs.  Nightingale Health Oyj

Titanium Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nightingale Health Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nightingale Health Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Titanium Oyj and Nightingale Health

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

The idea behind Titanium Oyj and Nightingale Health Oyj 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.