Correlation Between Advanced Health and Upland Software

Can any of the company-specific risk be diversified away by investing in both Advanced Health and Upland Software 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 Upland Software 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 Upland Software, you can compare the effects of market volatilities on Advanced Health and Upland Software 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 Upland Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Health and Upland Software.

Diversification Opportunities for Advanced Health and Upland Software

-0.58

Correlation Coefficient

Advanced Health  Upland Software

Excellent diversification

The 3 months correlation between Advanced and Upland is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Health Intelligence and Upland Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upland Software 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 Upland Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upland Software has no effect on the direction of Advanced Health i.e., Advanced Health and Upland Software go up and down completely randomly.

Pair Corralation between Advanced Health and Upland Software

Assuming the 90 days horizon Advanced Health Intelligence is expected to generate 18.84 times more return on investment than Upland Software. However, Advanced Health is 18.84 times more volatile than Upland Software. It trades about 0.11 of its potential returns per unit of risk. Upland Software is currently generating about 0.01 per unit of risk. If you would invest  5.00  in Advanced Health Intelligence on September 26, 2024 and sell it today you would lose (4.60) from holding Advanced Health Intelligence or give up 92.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	89.11%
Values	Daily Returns

Advanced Health Intelligence  vs.  Upland Software

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.

Upland Software

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Advanced Health and Upland Software

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

The idea behind Advanced Health Intelligence and Upland Software 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.