Correlation Between American Shared and Nano X

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

By analyzing existing cross correlation between American Shared Hospital and Nano X Imaging, you can compare the effects of market volatilities on American Shared and Nano X 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 American Shared with a short position of Nano X. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shared and Nano X.

Diversification Opportunities for American Shared and Nano X

0.61

Correlation Coefficient

American Shared  Nano X

Poor diversification

The 3 months correlation between American and Nano is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and Nano X Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano X Imaging and American Shared 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 American Shared Hospital are associated (or correlated) with Nano X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano X Imaging has no effect on the direction of American Shared i.e., American Shared and Nano X go up and down completely randomly.

Pair Corralation between American Shared and Nano X

Considering the 90-day investment horizon American Shared is expected to generate 1.82 times less return on investment than Nano X. But when comparing it to its historical volatility, American Shared Hospital is 2.83 times less risky than Nano X. It trades about 0.11 of its potential returns per unit of risk. Nano X Imaging is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  636.00  in Nano X Imaging on September 23, 2024 and sell it today you would earn a total of  40.00  from holding Nano X Imaging or generate 6.29% return on investment over 90 days.

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

American Shared Hospital  vs.  Nano X Imaging

American Shared Hospital

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Shared Hospital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, American Shared may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nano X Imaging

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nano X Imaging are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nano X showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Shared and Nano X

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

The idea behind American Shared Hospital and Nano X Imaging 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.