Correlation Between National Research and HealthEquity

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

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

Diversification Opportunities for National Research and HealthEquity

0.39

Correlation Coefficient

National Research  HealthEquity

Weak diversification

The 3 months correlation between National and HealthEquity is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding National Research Corp and HealthEquity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthEquity and National Research 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 National Research Corp are associated (or correlated) with HealthEquity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthEquity has no effect on the direction of National Research i.e., National Research and HealthEquity go up and down completely randomly.

Pair Corralation between National Research and HealthEquity

Considering the 90-day investment horizon National Research Corp is expected to under-perform the HealthEquity. In addition to that, National Research is 1.01 times more volatile than HealthEquity. It trades about -0.15 of its total potential returns per unit of risk. HealthEquity is currently generating about -0.04 per unit of volatility. If you would invest  9,595  in HealthEquity on December 31, 2024 and sell it today you would lose (899.00) from holding HealthEquity or give up 9.37% of portfolio value over 90 days.

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

National Research Corp  vs.  HealthEquity

National Research Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Research Corp 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 rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

HealthEquity

Risk-Adjusted Performance

Very Weak

Over the last 90 days HealthEquity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with National Research and HealthEquity

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

The idea behind National Research Corp and HealthEquity 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.