Correlation Between Definitive Healthcare and Phenixfin

Can any of the company-specific risk be diversified away by investing in both Definitive Healthcare and Phenixfin 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 Phenixfin 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 Phenixfin, you can compare the effects of market volatilities on Definitive Healthcare and Phenixfin 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 Phenixfin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and Phenixfin.

Diversification Opportunities for Definitive Healthcare and Phenixfin

-0.51

Correlation Coefficient

Definitive Healthcare  Phenixfin

Excellent diversification

The 3 months correlation between Definitive and Phenixfin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Phenixfin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phenixfin 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 Phenixfin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phenixfin has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Phenixfin go up and down completely randomly.

Pair Corralation between Definitive Healthcare and Phenixfin

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the Phenixfin. But the stock apears to be less risky and, when comparing its historical volatility, Definitive Healthcare Corp is 18.04 times less risky than Phenixfin. The stock trades about -0.04 of its potential returns per unit of risk. The Phenixfin is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,092  in Phenixfin on October 22, 2024 and sell it today you would earn a total of  1,895  from holding Phenixfin or generate 61.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.33%
Values	Daily Returns

Definitive Healthcare Corp  vs.  Phenixfin

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 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.

Phenixfin

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phenixfin are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Phenixfin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Definitive Healthcare and Phenixfin

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

The idea behind Definitive Healthcare Corp and Phenixfin 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.