Correlation Between Nextgen Healthcare and Cannabis Sativa

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

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

Diversification Opportunities for Nextgen Healthcare and Cannabis Sativa

-0.09

Correlation Coefficient

Nextgen Healthcare  Cannabis Sativa

Good diversification

The 3 months correlation between Nextgen and Cannabis is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nextgen Healthcare and Cannabis Sativa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Sativa and Nextgen Healthcare 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 Nextgen Healthcare are associated (or correlated) with Cannabis Sativa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Sativa has no effect on the direction of Nextgen Healthcare i.e., Nextgen Healthcare and Cannabis Sativa go up and down completely randomly.

Pair Corralation between Nextgen Healthcare and Cannabis Sativa

If you would invest  1.60  in Cannabis Sativa on October 7, 2024 and sell it today you would earn a total of  6.89  from holding Cannabis Sativa or generate 430.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Nextgen Healthcare  vs.  Cannabis Sativa

Nextgen Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextgen Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Nextgen Healthcare is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Cannabis Sativa

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cannabis Sativa are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting fundamental indicators, Cannabis Sativa unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nextgen Healthcare and Cannabis Sativa

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

The idea behind Nextgen Healthcare and Cannabis Sativa 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.