Correlation Between Nasdaq and HealWELL

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

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

Diversification Opportunities for Nasdaq and HealWELL

0.16

Correlation Coefficient

Nasdaq  HealWELL

Average diversification

The 3 months correlation between Nasdaq and HealWELL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and HealWELL AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealWELL AI and Nasdaq 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 Nasdaq Inc are associated (or correlated) with HealWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealWELL AI has no effect on the direction of Nasdaq i.e., Nasdaq and HealWELL go up and down completely randomly.

Pair Corralation between Nasdaq and HealWELL

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.36 times more return on investment than HealWELL. However, Nasdaq Inc is 2.74 times less risky than HealWELL. It trades about -0.02 of its potential returns per unit of risk. HealWELL AI is currently generating about -0.12 per unit of risk. If you would invest  7,816  in Nasdaq Inc on December 27, 2024 and sell it today you would lose (180.00) from holding Nasdaq Inc or give up 2.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Nasdaq Inc  vs.  HealWELL AI

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

HealWELL AI

Risk-Adjusted Performance

Very Weak

Over the last 90 days HealWELL AI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Nasdaq and HealWELL

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

The idea behind Nasdaq Inc and HealWELL AI 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.