Correlation Between Advanced Health and Intuit

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

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

Diversification Opportunities for Advanced Health and Intuit

-0.64

Correlation Coefficient

Advanced Health  Intuit

Excellent diversification

The 3 months correlation between Advanced and Intuit is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Health Intelligence and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc and Advanced Health 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 Advanced Health Intelligence are associated (or correlated) with Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of Advanced Health i.e., Advanced Health and Intuit go up and down completely randomly.

Pair Corralation between Advanced Health and Intuit

Assuming the 90 days horizon Advanced Health Intelligence is expected to generate 60.79 times more return on investment than Intuit. However, Advanced Health is 60.79 times more volatile than Intuit Inc. It trades about 0.09 of its potential returns per unit of risk. Intuit Inc is currently generating about 0.04 per unit of risk. If you would invest  9.00  in Advanced Health Intelligence on September 23, 2024 and sell it today you would lose (8.60) from holding Advanced Health Intelligence or give up 95.56% of portfolio value over 90 days.

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

Advanced Health Intelligence  vs.  Intuit Inc

Advanced Health Inte

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intuit Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Advanced Health and Intuit

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

The idea behind Advanced Health Intelligence and Intuit Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.