Correlation Between Coloplast A/S and NATIONAL HEALTHCARE

Can any of the company-specific risk be diversified away by investing in both Coloplast A/S and NATIONAL 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 Coloplast A/S and NATIONAL HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coloplast AS and NATIONAL HEALTHCARE, you can compare the effects of market volatilities on Coloplast A/S and NATIONAL 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 Coloplast A/S with a short position of NATIONAL HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast A/S and NATIONAL HEALTHCARE.

Diversification Opportunities for Coloplast A/S and NATIONAL HEALTHCARE

-0.45

Correlation Coefficient

Coloplast A/S  NATIONAL HEALTHCARE

Very good diversification

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

Pair Corralation between Coloplast A/S and NATIONAL HEALTHCARE

Assuming the 90 days trading horizon Coloplast AS is expected to under-perform the NATIONAL HEALTHCARE. In addition to that, Coloplast A/S is 1.24 times more volatile than NATIONAL HEALTHCARE. It trades about -0.12 of its total potential returns per unit of risk. NATIONAL HEALTHCARE is currently generating about 0.1 per unit of volatility. If you would invest  8,053  in NATIONAL HEALTHCARE on April 23, 2025 and sell it today you would earn a total of  747.00  from holding NATIONAL HEALTHCARE or generate 9.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Coloplast AS  vs.  NATIONAL HEALTHCARE

Coloplast A/S

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coloplast AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NATIONAL HEALTHCARE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NATIONAL HEALTHCARE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, NATIONAL HEALTHCARE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Coloplast A/S and NATIONAL HEALTHCARE

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

The idea behind Coloplast AS and NATIONAL HEALTHCARE 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.