Correlation Between NMC Health and Maptelligent

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

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

Diversification Opportunities for NMC Health and Maptelligent

0.68

Correlation Coefficient

NMC Health  Maptelligent

Poor diversification

The 3 months correlation between NMC and Maptelligent is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NMC Health PLC and Maptelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maptelligent and NMC 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 NMC Health PLC are associated (or correlated) with Maptelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maptelligent has no effect on the direction of NMC Health i.e., NMC Health and Maptelligent go up and down completely randomly.

Pair Corralation between NMC Health and Maptelligent

If you would invest  0.04  in Maptelligent on September 23, 2024 and sell it today you would lose (0.01) from holding Maptelligent or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.78%
Values	Daily Returns

NMC Health PLC  vs.  Maptelligent

NMC Health PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NMC Health PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, NMC Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Maptelligent

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maptelligent are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Maptelligent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NMC Health and Maptelligent

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

The idea behind NMC Health PLC and Maptelligent 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.

Check out your portfolio center.

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.