Correlation Between Boreo Oyj and Nightingale Health

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

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

Diversification Opportunities for Boreo Oyj and Nightingale Health

0.49

Correlation Coefficient

Boreo Oyj  Nightingale Health

Very weak diversification

The 3 months correlation between Boreo and Nightingale is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Boreo 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 Boreo Oyj 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 Boreo 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 Boreo Oyj i.e., Boreo Oyj and Nightingale Health go up and down completely randomly.

Pair Corralation between Boreo Oyj and Nightingale Health

Assuming the 90 days trading horizon Boreo Oyj is expected to under-perform the Nightingale Health. But the stock apears to be less risky and, when comparing its historical volatility, Boreo Oyj is 2.39 times less risky than Nightingale Health. The stock trades about -0.34 of its potential returns per unit of risk. The Nightingale Health Oyj is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  329.00  in Nightingale Health Oyj on September 16, 2024 and sell it today you would lose (35.00) from holding Nightingale Health Oyj or give up 10.64% of portfolio value over 90 days.

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

Boreo Oyj  vs.  Nightingale Health Oyj

Boreo Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boreo Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing 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 newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boreo Oyj and Nightingale Health

The main advantage of trading using opposite Boreo Oyj and Nightingale Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boreo Oyj 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 Boreo 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.