Correlation Between NIGHTINGALE HEALTH and SHIP HEALTHCARE

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

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

Diversification Opportunities for NIGHTINGALE HEALTH and SHIP HEALTHCARE

0.45

Correlation Coefficient

NIGHTINGALE HEALTH  SHIP HEALTHCARE

Very weak diversification

The 3 months correlation between NIGHTINGALE and SHIP is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NIGHTINGALE HEALTH EO and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and NIGHTINGALE 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 NIGHTINGALE HEALTH EO are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of NIGHTINGALE HEALTH i.e., NIGHTINGALE HEALTH and SHIP HEALTHCARE go up and down completely randomly.

Pair Corralation between NIGHTINGALE HEALTH and SHIP HEALTHCARE

Assuming the 90 days horizon NIGHTINGALE HEALTH EO is expected to under-perform the SHIP HEALTHCARE. But the stock apears to be less risky and, when comparing its historical volatility, NIGHTINGALE HEALTH EO is 1.1 times less risky than SHIP HEALTHCARE. The stock trades about -0.04 of its potential returns per unit of risk. The SHIP HEALTHCARE HLDGINC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,180  in SHIP HEALTHCARE HLDGINC on April 9, 2025 and sell it today you would lose (20.00) from holding SHIP HEALTHCARE HLDGINC or give up 1.69% of portfolio value over 90 days.

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

NIGHTINGALE HEALTH EO  vs.  SHIP HEALTHCARE HLDGINC

NIGHTINGALE HEALTH

Risk-Adjusted Performance

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SHIP HEALTHCARE HLDGINC

Risk-Adjusted Performance

Very Weak

Over the last 90 days SHIP HEALTHCARE HLDGINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SHIP HEALTHCARE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NIGHTINGALE HEALTH and SHIP HEALTHCARE

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

The idea behind NIGHTINGALE HEALTH EO and SHIP HEALTHCARE HLDGINC 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.