Correlation Between FOXO Technologies and HealthEquity

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

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

Diversification Opportunities for FOXO Technologies and HealthEquity

0.8

Correlation Coefficient

FOXO Technologies  HealthEquity

Very poor diversification

The 3 months correlation between FOXO and HealthEquity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FOXO Technologies and HealthEquity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthEquity and FOXO Technologies 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 FOXO Technologies are associated (or correlated) with HealthEquity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthEquity has no effect on the direction of FOXO Technologies i.e., FOXO Technologies and HealthEquity go up and down completely randomly.

Pair Corralation between FOXO Technologies and HealthEquity

Given the investment horizon of 90 days FOXO Technologies is expected to generate 26.18 times more return on investment than HealthEquity. However, FOXO Technologies is 26.18 times more volatile than HealthEquity. It trades about 0.13 of its potential returns per unit of risk. HealthEquity is currently generating about 0.2 per unit of risk. If you would invest  15.00  in FOXO Technologies on August 31, 2024 and sell it today you would earn a total of  36.00  from holding FOXO Technologies or generate 240.0% return on investment over 90 days.

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

FOXO Technologies  vs.  HealthEquity

FOXO Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FOXO Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, FOXO Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

HealthEquity

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HealthEquity are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, HealthEquity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FOXO Technologies and HealthEquity

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

The idea behind FOXO Technologies and HealthEquity 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.