Correlation Between Pizza Pizza and NorthWest Healthcare

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

By analyzing existing cross correlation between Pizza Pizza Royalty and NorthWest Healthcare Properties, you can compare the effects of market volatilities on Pizza Pizza and NorthWest 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 Pizza Pizza with a short position of NorthWest Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pizza Pizza and NorthWest Healthcare.

Diversification Opportunities for Pizza Pizza and NorthWest Healthcare

0.35

Correlation Coefficient

Pizza Pizza  NorthWest Healthcare

Weak diversification

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

Pair Corralation between Pizza Pizza and NorthWest Healthcare

Assuming the 90 days trading horizon Pizza Pizza Royalty is expected to generate 0.79 times more return on investment than NorthWest Healthcare. However, Pizza Pizza Royalty is 1.26 times less risky than NorthWest Healthcare. It trades about 0.2 of its potential returns per unit of risk. NorthWest Healthcare Properties is currently generating about 0.02 per unit of risk. If you would invest  1,427  in Pizza Pizza Royalty on May 6, 2025 and sell it today you would earn a total of  151.00  from holding Pizza Pizza Royalty or generate 10.58% return on investment over 90 days.

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

Pizza Pizza Royalty  vs.  NorthWest Healthcare Propertie

Pizza Pizza Royalty

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pizza Pizza Royalty are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Pizza Pizza may actually be approaching a critical reversion point that can send shares even higher in September 2025.

NorthWest Healthcare

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NorthWest Healthcare Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, NorthWest Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pizza Pizza and NorthWest Healthcare

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

The idea behind Pizza Pizza Royalty and NorthWest Healthcare Properties 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.