Correlation Between HealthEquity and 10X Genomics

Can any of the company-specific risk be diversified away by investing in both HealthEquity and 10X Genomics 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 10X Genomics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HealthEquity and 10X Genomics, you can compare the effects of market volatilities on HealthEquity and 10X Genomics 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 10X Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HealthEquity and 10X Genomics.

Diversification Opportunities for HealthEquity and 10X Genomics

-0.49

Correlation Coefficient

HealthEquity  10X Genomics

Very good diversification

The 3 months correlation between HealthEquity and 10X is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding HealthEquity and 10X Genomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 10X Genomics 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 10X Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 10X Genomics has no effect on the direction of HealthEquity i.e., HealthEquity and 10X Genomics go up and down completely randomly.

Pair Corralation between HealthEquity and 10X Genomics

Considering the 90-day investment horizon HealthEquity is expected to generate 0.29 times more return on investment than 10X Genomics. However, HealthEquity is 3.46 times less risky than 10X Genomics. It trades about -0.07 of its potential returns per unit of risk. 10X Genomics is currently generating about -0.25 per unit of risk. If you would invest  10,771  in HealthEquity on November 29, 2024 and sell it today you would lose (210.00) from holding HealthEquity or give up 1.95% of portfolio value over 90 days.

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

HealthEquity  vs.  10X Genomics

HealthEquity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HealthEquity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

10X Genomics

Risk-Adjusted Performance

Very Weak

Over the last 90 days 10X Genomics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with HealthEquity and 10X Genomics

The main advantage of trading using opposite HealthEquity and 10X Genomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthEquity position performs unexpectedly, 10X Genomics 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 10X Genomics will offset losses from the drop in 10X Genomics' long position.

The idea behind HealthEquity and 10X Genomics 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.