Correlation Between HealthEquity and Healixa

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

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

Diversification Opportunities for HealthEquity and Healixa

-0.61

Correlation Coefficient

HealthEquity  Healixa

Excellent diversification

The 3 months correlation between HealthEquity and Healixa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding HealthEquity and Healixa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healixa and HealthEquity 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 HealthEquity are associated (or correlated) with Healixa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healixa has no effect on the direction of HealthEquity i.e., HealthEquity and Healixa go up and down completely randomly.

Pair Corralation between HealthEquity and Healixa

Considering the 90-day investment horizon HealthEquity is expected to generate 0.15 times more return on investment than Healixa. However, HealthEquity is 6.86 times less risky than Healixa. It trades about 0.01 of its potential returns per unit of risk. Healixa is currently generating about -0.02 per unit of risk. If you would invest  10,300  in HealthEquity on December 4, 2024 and sell it today you would lose (1.00) from holding HealthEquity or give up 0.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

HealthEquity  vs.  Healixa

HealthEquity

Risk-Adjusted Performance

Weak

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

Healixa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Healixa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with HealthEquity and Healixa

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

The idea behind HealthEquity and Healixa 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.