Correlation Between OPKO HEALTH and NIGHTINGALE HEALTH

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

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

Diversification Opportunities for OPKO HEALTH and NIGHTINGALE HEALTH

-0.33

Correlation Coefficient

OPKO HEALTH  NIGHTINGALE HEALTH

Very good diversification

The 3 months correlation between OPKO and NIGHTINGALE is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH and OPKO 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 OPKO HEALTH 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 OPKO HEALTH i.e., OPKO HEALTH and NIGHTINGALE HEALTH go up and down completely randomly.

Pair Corralation between OPKO HEALTH and NIGHTINGALE HEALTH

Assuming the 90 days trading horizon OPKO HEALTH is expected to generate 4.81 times less return on investment than NIGHTINGALE HEALTH. But when comparing it to its historical volatility, OPKO HEALTH is 1.45 times less risky than NIGHTINGALE HEALTH. It trades about 0.02 of its potential returns per unit of risk. NIGHTINGALE HEALTH EO is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  108.00  in NIGHTINGALE HEALTH EO on October 26, 2024 and sell it today you would earn a total of  189.00  from holding NIGHTINGALE HEALTH EO or generate 175.0% return on investment over 90 days.

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

OPKO HEALTH  vs.  NIGHTINGALE HEALTH EO

OPKO HEALTH

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OPKO HEALTH are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OPKO HEALTH may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NIGHTINGALE HEALTH

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with OPKO HEALTH and NIGHTINGALE HEALTH

The main advantage of trading using opposite OPKO HEALTH and NIGHTINGALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH 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 OPKO HEALTH 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.