Correlation Between National Health and Siamgas

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

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

Diversification Opportunities for National Health and Siamgas

0.26

Correlation Coefficient

National Health  Siamgas

Modest diversification

The 3 months correlation between National and Siamgas is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche and National Health 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 Health Investors are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of National Health i.e., National Health and Siamgas go up and down completely randomly.

Pair Corralation between National Health and Siamgas

Assuming the 90 days trading horizon National Health is expected to generate 2.94 times less return on investment than Siamgas. But when comparing it to its historical volatility, National Health Investors is 4.35 times less risky than Siamgas. It trades about 0.06 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Siamgas And Petrochemicals on September 23, 2024 and sell it today you would earn a total of  7.00  from holding Siamgas And Petrochemicals or generate 63.64% return on investment over 90 days.

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

National Health Investors  vs.  Siamgas And Petrochemicals

National Health Investors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Health Investors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Siamgas And Petroche

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Siamgas is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Health and Siamgas

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

The idea behind National Health Investors and Siamgas And Petrochemicals 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.