Correlation Between Definitive Healthcare and Akso Health

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

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

Diversification Opportunities for Definitive Healthcare and Akso Health

-0.23

Correlation Coefficient

Definitive Healthcare  Akso Health

Very good diversification

The 3 months correlation between Definitive and Akso is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Akso Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akso Health Group and Definitive Healthcare 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 Definitive Healthcare Corp are associated (or correlated) with Akso Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akso Health Group has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Akso Health go up and down completely randomly.

Pair Corralation between Definitive Healthcare and Akso Health

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the Akso Health. But the stock apears to be less risky and, when comparing its historical volatility, Definitive Healthcare Corp is 7.56 times less risky than Akso Health. The stock trades about -0.14 of its potential returns per unit of risk. The Akso Health Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  86.00  in Akso Health Group on September 26, 2024 and sell it today you would earn a total of  25.00  from holding Akso Health Group or generate 29.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Definitive Healthcare Corp  vs.  Akso Health Group

Definitive Healthcare

Risk-Adjusted Performance

0 of 100

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 fairly strong technical indicators, Definitive Healthcare is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Akso Health Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Akso Health Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical indicators, Akso Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Definitive Healthcare and Akso Health

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

The idea behind Definitive Healthcare Corp and Akso Health Group 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.