Correlation Between Health Catalyst and Premier

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

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

Diversification Opportunities for Health Catalyst and Premier

0.65

Correlation Coefficient

Health Catalyst  Premier

Poor diversification

The 3 months correlation between Health and Premier is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Health Catalyst and Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier 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 Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier has no effect on the direction of Health Catalyst i.e., Health Catalyst and Premier go up and down completely randomly.

Pair Corralation between Health Catalyst and Premier

Given the investment horizon of 90 days Health Catalyst is expected to under-perform the Premier. In addition to that, Health Catalyst is 1.65 times more volatile than Premier. It trades about -0.16 of its total potential returns per unit of risk. Premier is currently generating about -0.05 per unit of volatility. If you would invest  2,095  in Premier on December 29, 2024 and sell it today you would lose (176.00) from holding Premier or give up 8.4% of portfolio value over 90 days.

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

Health Catalyst  vs.  Premier

Health Catalyst

Risk-Adjusted Performance

Very Weak

Over the last 90 days Health Catalyst has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Premier

Risk-Adjusted Performance

Very Weak

Over the last 90 days Premier has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Health Catalyst and Premier

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

The idea behind Health Catalyst and Premier 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.