Correlation Between Toivo Group and Nightingale Health

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

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

Diversification Opportunities for Toivo Group and Nightingale Health

0.47

Correlation Coefficient

Toivo Group  Nightingale Health

Very weak diversification

The 3 months correlation between Toivo and Nightingale is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Toivo Group 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 Toivo Group 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 Toivo Group 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 Toivo Group i.e., Toivo Group and Nightingale Health go up and down completely randomly.

Pair Corralation between Toivo Group and Nightingale Health

Assuming the 90 days trading horizon Toivo Group Oyj is expected to under-perform the Nightingale Health. But the stock apears to be less risky and, when comparing its historical volatility, Toivo Group Oyj is 1.29 times less risky than Nightingale Health. The stock trades about -0.06 of its potential returns per unit of risk. The Nightingale Health Oyj is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  312.00  in Nightingale Health Oyj on October 10, 2024 and sell it today you would lose (18.00) from holding Nightingale Health Oyj or give up 5.77% of portfolio value over 90 days.

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

Toivo Group Oyj  vs.  Nightingale Health Oyj

Toivo Group Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toivo Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm 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 somewhat strong basic indicators, Nightingale Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Toivo Group and Nightingale Health

The main advantage of trading using opposite Toivo Group and Nightingale Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toivo Group 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 Toivo Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.