Correlation Between Loyalty Ventures and Viemed Healthcare

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

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

Diversification Opportunities for Loyalty Ventures and Viemed Healthcare

0.79

Correlation Coefficient

Loyalty Ventures  Viemed Healthcare

Poor diversification

The 3 months correlation between Loyalty and Viemed is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Loyalty Ventures and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare and Loyalty Ventures 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 Loyalty Ventures are associated (or correlated) with Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Loyalty Ventures i.e., Loyalty Ventures and Viemed Healthcare go up and down completely randomly.

Pair Corralation between Loyalty Ventures and Viemed Healthcare

If you would invest  783.00  in Viemed Healthcare on October 23, 2024 and sell it today you would earn a total of  52.00  from holding Viemed Healthcare or generate 6.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

Loyalty Ventures  vs.  Viemed Healthcare

Loyalty Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

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

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Loyalty Ventures and Viemed Healthcare

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

The idea behind Loyalty Ventures and Viemed Healthcare 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.