Correlation Between Health Catalyst and CPSI Old

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

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

Diversification Opportunities for Health Catalyst and CPSI Old

-0.6

Correlation Coefficient

Health Catalyst  CPSI Old

Excellent diversification

The 3 months correlation between Health and CPSI is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Health Catalyst and CPSI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPSI Old and Health Catalyst 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 Health Catalyst are associated (or correlated) with CPSI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPSI Old has no effect on the direction of Health Catalyst i.e., Health Catalyst and CPSI Old go up and down completely randomly.

Pair Corralation between Health Catalyst and CPSI Old

If you would invest  725.00  in Health Catalyst on August 31, 2024 and sell it today you would earn a total of  140.00  from holding Health Catalyst or generate 19.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Health Catalyst  vs.  CPSI Old

Health Catalyst

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Health Catalyst are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Health Catalyst unveiled solid returns over the last few months and may actually be approaching a breakup point.

CPSI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CPSI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, CPSI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Health Catalyst and CPSI Old

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

The idea behind Health Catalyst and CPSI Old 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.