Correlation Between PT Wintermar and NIGHTINGALE HEALTH

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Can any of the company-specific risk be diversified away by investing in both PT Wintermar 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 PT Wintermar and NIGHTINGALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Wintermar Offshore and NIGHTINGALE HEALTH EO, you can compare the effects of market volatilities on PT Wintermar 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 PT Wintermar with a short position of NIGHTINGALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Wintermar and NIGHTINGALE HEALTH.

Diversification Opportunities for PT Wintermar and NIGHTINGALE HEALTH

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between W6O and NIGHTINGALE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH and PT Wintermar 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 PT Wintermar Offshore 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 has no effect on the direction of PT Wintermar i.e., PT Wintermar and NIGHTINGALE HEALTH go up and down completely randomly.

Pair Corralation between PT Wintermar and NIGHTINGALE HEALTH

Assuming the 90 days horizon PT Wintermar Offshore is expected to generate 2.43 times more return on investment than NIGHTINGALE HEALTH. However, PT Wintermar is 2.43 times more volatile than NIGHTINGALE HEALTH EO. It trades about 0.05 of its potential returns per unit of risk. NIGHTINGALE HEALTH EO is currently generating about 0.07 per unit of risk. If you would invest  1.25  in PT Wintermar Offshore on October 11, 2024 and sell it today you would earn a total of  0.90  from holding PT Wintermar Offshore or generate 72.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

PT Wintermar Offshore  vs.  NIGHTINGALE HEALTH EO

 Performance 
       Timeline  
PT Wintermar Offshore 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PT Wintermar Offshore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
NIGHTINGALE HEALTH 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NIGHTINGALE HEALTH EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NIGHTINGALE HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PT Wintermar and NIGHTINGALE HEALTH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Wintermar and NIGHTINGALE HEALTH

The main advantage of trading using opposite PT Wintermar and NIGHTINGALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Wintermar 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 PT Wintermar Offshore and NIGHTINGALE HEALTH EO 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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