Correlation Between National HealthCare and CryoCell International

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

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

Diversification Opportunities for National HealthCare and CryoCell International

0.35

Correlation Coefficient

National HealthCare  CryoCell International

Weak diversification

The 3 months correlation between National and CryoCell is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding National HealthCare and CryoCell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoCell International and National HealthCare 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 HealthCare are associated (or correlated) with CryoCell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoCell International has no effect on the direction of National HealthCare i.e., National HealthCare and CryoCell International go up and down completely randomly.

Pair Corralation between National HealthCare and CryoCell International

Considering the 90-day investment horizon National HealthCare is expected to under-perform the CryoCell International. But the stock apears to be less risky and, when comparing its historical volatility, National HealthCare is 2.38 times less risky than CryoCell International. The stock trades about -0.03 of its potential returns per unit of risk. The CryoCell International is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  645.00  in CryoCell International on August 31, 2024 and sell it today you would earn a total of  222.00  from holding CryoCell International or generate 34.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

National HealthCare  vs.  CryoCell International

National HealthCare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National HealthCare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, National HealthCare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CryoCell International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CryoCell International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, CryoCell International disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National HealthCare and CryoCell International

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

The idea behind National HealthCare and CryoCell International 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 Stocks Directory module to find actively traded stocks across global markets.