Correlation Between Greenwich LifesciencesInc and National Health

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Can any of the company-specific risk be diversified away by investing in both Greenwich LifesciencesInc and National 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 Greenwich LifesciencesInc and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenwich LifesciencesInc and National Health Investors, you can compare the effects of market volatilities on Greenwich LifesciencesInc and National 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 Greenwich LifesciencesInc with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenwich LifesciencesInc and National Health.

Diversification Opportunities for Greenwich LifesciencesInc and National Health

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Greenwich and National is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Greenwich LifesciencesInc and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Greenwich LifesciencesInc 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 Greenwich LifesciencesInc are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Greenwich LifesciencesInc i.e., Greenwich LifesciencesInc and National Health go up and down completely randomly.

Pair Corralation between Greenwich LifesciencesInc and National Health

Given the investment horizon of 90 days Greenwich LifesciencesInc is expected to generate 2.65 times more return on investment than National Health. However, Greenwich LifesciencesInc is 2.65 times more volatile than National Health Investors. It trades about 0.29 of its potential returns per unit of risk. National Health Investors is currently generating about 0.09 per unit of risk. If you would invest  912.00  in Greenwich LifesciencesInc on September 10, 2022 and sell it today you would earn a total of  373.20  from holding Greenwich LifesciencesInc or generate 40.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Greenwich LifesciencesInc  vs.  National Health Investors

 Performance (%) 
       Timeline  
Greenwich LifesciencesInc 
Greenwich Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Greenwich LifesciencesInc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Greenwich LifesciencesInc reported solid returns over the last few months and may actually be approaching a breakup point.

Greenwich Price Channel

National Health Investors 
National Performance
0 of 100
Over the last 90 days National Health Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

National Price Channel

Greenwich LifesciencesInc and National Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Greenwich LifesciencesInc and National Health

The main advantage of trading using opposite Greenwich LifesciencesInc and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenwich LifesciencesInc position performs unexpectedly, National 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 National Health will offset losses from the drop in National Health's long position.
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The idea behind Greenwich LifesciencesInc and National Health Investors 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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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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