Correlation Between Dennys Corp and Definitive Healthcare

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

Diversification Opportunities for Dennys Corp and Definitive Healthcare

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Dennys and Definitive is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Definitive Healthcare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definitive Healthcare and Dennys Corp 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 Dennys Corp are associated (or correlated) with Definitive Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definitive Healthcare has no effect on the direction of Dennys Corp i.e., Dennys Corp and Definitive Healthcare go up and down completely randomly.

Pair Corralation between Dennys Corp and Definitive Healthcare

Given the investment horizon of 90 days Dennys Corp is expected to generate 1.02 times more return on investment than Definitive Healthcare. However, Dennys Corp is 1.02 times more volatile than Definitive Healthcare Corp. It trades about 0.07 of its potential returns per unit of risk. Definitive Healthcare Corp is currently generating about -0.1 per unit of risk. If you would invest  577.00  in Dennys Corp on October 23, 2024 and sell it today you would earn a total of  16.00  from holding Dennys Corp or generate 2.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dennys Corp  vs.  Definitive Healthcare Corp

 Performance 
       Timeline  
Dennys Corp 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Dennys Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Dennys Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Definitive Healthcare 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Definitive Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Dennys Corp and Definitive Healthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dennys Corp and Definitive Healthcare

The main advantage of trading using opposite Dennys Corp and Definitive Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp position performs unexpectedly, Definitive 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 Definitive Healthcare will offset losses from the drop in Definitive Healthcare's long position.
The idea behind Dennys Corp and Definitive Healthcare Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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