Correlation Between Goodrx Holdings and Streamline Health

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

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

Diversification Opportunities for Goodrx Holdings and Streamline Health

0.27

Correlation Coefficient

Goodrx Holdings  Streamline Health

Modest diversification

The 3 months correlation between Goodrx and Streamline is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Goodrx Holdings and Streamline Health Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Streamline Health and Goodrx Holdings 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 Goodrx Holdings are associated (or correlated) with Streamline Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Streamline Health has no effect on the direction of Goodrx Holdings i.e., Goodrx Holdings and Streamline Health go up and down completely randomly.

Pair Corralation between Goodrx Holdings and Streamline Health

Given the investment horizon of 90 days Goodrx Holdings is expected to generate 0.73 times more return on investment than Streamline Health. However, Goodrx Holdings is 1.38 times less risky than Streamline Health. It trades about 0.0 of its potential returns per unit of risk. Streamline Health Solutions is currently generating about -0.04 per unit of risk. If you would invest  462.00  in Goodrx Holdings on December 27, 2024 and sell it today you would lose (8.00) from holding Goodrx Holdings or give up 1.73% of portfolio value over 90 days.

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

Goodrx Holdings  vs.  Streamline Health Solutions

Goodrx Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goodrx Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Goodrx Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Streamline Health

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Goodrx Holdings and Streamline Health

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

The idea behind Goodrx Holdings and Streamline Health Solutions 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.