Correlation Between Fair Isaac and TruBridge

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

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

Diversification Opportunities for Fair Isaac and TruBridge

-0.16

Correlation Coefficient

Fair Isaac  TruBridge

Good diversification

The 3 months correlation between Fair and TruBridge is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac and TruBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TruBridge and Fair Isaac 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 Fair Isaac are associated (or correlated) with TruBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TruBridge has no effect on the direction of Fair Isaac i.e., Fair Isaac and TruBridge go up and down completely randomly.

Pair Corralation between Fair Isaac and TruBridge

Given the investment horizon of 90 days Fair Isaac is expected to under-perform the TruBridge. In addition to that, Fair Isaac is 1.02 times more volatile than TruBridge. It trades about -0.35 of its total potential returns per unit of risk. TruBridge is currently generating about 0.59 per unit of volatility. If you would invest  1,902  in TruBridge on October 26, 2024 and sell it today you would earn a total of  429.00  from holding TruBridge or generate 22.56% return on investment over 90 days.

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

Fair Isaac  vs.  TruBridge

Fair Isaac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fair Isaac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

TruBridge

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in TruBridge are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TruBridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fair Isaac and TruBridge

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

The idea behind Fair Isaac and TruBridge 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.