Correlation Between HEALTHSTREAM (HL5SG) and METAIR INVTS

Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM (HL5SG) and METAIR INVTS 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 HEALTHSTREAM (HL5SG) and METAIR INVTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HEALTHSTREAM and METAIR INVTS LTD, you can compare the effects of market volatilities on HEALTHSTREAM (HL5SG) and METAIR INVTS 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 HEALTHSTREAM (HL5SG) with a short position of METAIR INVTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM (HL5SG) and METAIR INVTS.

Diversification Opportunities for HEALTHSTREAM (HL5SG) and METAIR INVTS

0.19

Correlation Coefficient

HEALTHSTREAM (HL5SG)  METAIR INVTS

Average diversification

The 3 months correlation between HEALTHSTREAM and METAIR is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and METAIR INVTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METAIR INVTS LTD and HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM are associated (or correlated) with METAIR INVTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METAIR INVTS LTD has no effect on the direction of HEALTHSTREAM (HL5SG) i.e., HEALTHSTREAM (HL5SG) and METAIR INVTS go up and down completely randomly.

Pair Corralation between HEALTHSTREAM (HL5SG) and METAIR INVTS

Assuming the 90 days trading horizon HEALTHSTREAM is expected to generate 0.16 times more return on investment than METAIR INVTS. However, HEALTHSTREAM is 6.37 times less risky than METAIR INVTS. It trades about -0.06 of its potential returns per unit of risk. METAIR INVTS LTD is currently generating about -0.07 per unit of risk. If you would invest  3,057  in HEALTHSTREAM on December 25, 2024 and sell it today you would lose (157.00) from holding HEALTHSTREAM or give up 5.14% of portfolio value over 90 days.

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

HEALTHSTREAM  vs.  METAIR INVTS LTD

HEALTHSTREAM (HL5SG)

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEALTHSTREAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, HEALTHSTREAM (HL5SG) is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

METAIR INVTS LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days METAIR INVTS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with HEALTHSTREAM (HL5SG) and METAIR INVTS

The main advantage of trading using opposite HEALTHSTREAM (HL5SG) and METAIR INVTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM (HL5SG) position performs unexpectedly, METAIR INVTS 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 METAIR INVTS will offset losses from the drop in METAIR INVTS's long position.

The idea behind HEALTHSTREAM and METAIR INVTS LTD 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.