Correlation Between HealthEquity and Vitalhub Corp

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

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

Diversification Opportunities for HealthEquity and Vitalhub Corp

0.88

Correlation Coefficient

HealthEquity  Vitalhub Corp

Very poor diversification

The 3 months correlation between HealthEquity and Vitalhub is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding HealthEquity and Vitalhub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitalhub Corp 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 Vitalhub Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitalhub Corp has no effect on the direction of HealthEquity i.e., HealthEquity and Vitalhub Corp go up and down completely randomly.

Pair Corralation between HealthEquity and Vitalhub Corp

Considering the 90-day investment horizon HealthEquity is expected to generate 1.09 times less return on investment than Vitalhub Corp. In addition to that, HealthEquity is 1.03 times more volatile than Vitalhub Corp. It trades about 0.15 of its total potential returns per unit of risk. Vitalhub Corp is currently generating about 0.17 per unit of volatility. If you would invest  650.00  in Vitalhub Corp on September 14, 2024 and sell it today you would earn a total of  155.00  from holding Vitalhub Corp or generate 23.85% return on investment over 90 days.

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

HealthEquity  vs.  Vitalhub Corp

HealthEquity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HealthEquity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, HealthEquity showed solid returns over the last few months and may actually be approaching a breakup point.

Vitalhub Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vitalhub Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental drivers, Vitalhub Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HealthEquity and Vitalhub Corp

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

The idea behind HealthEquity and Vitalhub Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.