Correlation Between HealthEquity and Waystar Holding

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

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

Diversification Opportunities for HealthEquity and Waystar Holding

0.86

Correlation Coefficient

HealthEquity  Waystar Holding

Very poor diversification

The 3 months correlation between HealthEquity and Waystar is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding HealthEquity and Waystar Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waystar Holding 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 Waystar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waystar Holding Corp has no effect on the direction of HealthEquity i.e., HealthEquity and Waystar Holding go up and down completely randomly.

Pair Corralation between HealthEquity and Waystar Holding

Considering the 90-day investment horizon HealthEquity is expected to generate 1.12 times less return on investment than Waystar Holding. In addition to that, HealthEquity is 1.32 times more volatile than Waystar Holding Corp. It trades about 0.15 of its total potential returns per unit of risk. Waystar Holding Corp is currently generating about 0.22 per unit of volatility. If you would invest  2,728  in Waystar Holding Corp on September 14, 2024 and sell it today you would earn a total of  691.00  from holding Waystar Holding Corp or generate 25.33% return on investment over 90 days.

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

HealthEquity  vs.  Waystar Holding 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.

Waystar Holding Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Waystar Holding Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Waystar Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HealthEquity and Waystar Holding

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

The idea behind HealthEquity and Waystar Holding 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.