Correlation Between FactSet Research and Viemed Healthcare

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

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

Diversification Opportunities for FactSet Research and Viemed Healthcare

0.42

Correlation Coefficient

FactSet Research  Viemed Healthcare

Very weak diversification

The 3 months correlation between FactSet and Viemed is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare and FactSet Research 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 FactSet Research Systems are associated (or correlated) with Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of FactSet Research i.e., FactSet Research and Viemed Healthcare go up and down completely randomly.

Pair Corralation between FactSet Research and Viemed Healthcare

Considering the 90-day investment horizon FactSet Research Systems is expected to generate 0.53 times more return on investment than Viemed Healthcare. However, FactSet Research Systems is 1.89 times less risky than Viemed Healthcare. It trades about 0.1 of its potential returns per unit of risk. Viemed Healthcare is currently generating about 0.0 per unit of risk. If you would invest  48,038  in FactSet Research Systems on September 20, 2024 and sell it today you would earn a total of  843.00  from holding FactSet Research Systems or generate 1.75% return on investment over 90 days.

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

FactSet Research Systems  vs.  Viemed Healthcare

FactSet Research Systems

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, FactSet Research is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Viemed Healthcare

Risk-Adjusted Performance

10 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viemed Healthcare are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Viemed Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FactSet Research and Viemed Healthcare

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

The idea behind FactSet Research Systems and Viemed Healthcare 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.