Correlation Between Recursion Pharmaceuticals and NORTHWELL

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

By analyzing existing cross correlation between Recursion Pharmaceuticals and NORTHWELL HEALTHCARE INC, you can compare the effects of market volatilities on Recursion Pharmaceuticals and NORTHWELL 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 Recursion Pharmaceuticals with a short position of NORTHWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recursion Pharmaceuticals and NORTHWELL.

Diversification Opportunities for Recursion Pharmaceuticals and NORTHWELL

-0.17

Correlation Coefficient

Recursion Pharmaceuticals  NORTHWELL

Good diversification

The 3 months correlation between Recursion and NORTHWELL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Recursion Pharmaceuticals and NORTHWELL HEALTHCARE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHWELL HEALTHCARE INC and Recursion Pharmaceuticals 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 Recursion Pharmaceuticals are associated (or correlated) with NORTHWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHWELL HEALTHCARE INC has no effect on the direction of Recursion Pharmaceuticals i.e., Recursion Pharmaceuticals and NORTHWELL go up and down completely randomly.

Pair Corralation between Recursion Pharmaceuticals and NORTHWELL

Given the investment horizon of 90 days Recursion Pharmaceuticals is expected to under-perform the NORTHWELL. In addition to that, Recursion Pharmaceuticals is 6.38 times more volatile than NORTHWELL HEALTHCARE INC. It trades about -0.01 of its total potential returns per unit of risk. NORTHWELL HEALTHCARE INC is currently generating about 0.02 per unit of volatility. If you would invest  7,988  in NORTHWELL HEALTHCARE INC on December 30, 2024 and sell it today you would earn a total of  72.00  from holding NORTHWELL HEALTHCARE INC or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.03%
Values	Daily Returns

Recursion Pharmaceuticals  vs.  NORTHWELL HEALTHCARE INC

Recursion Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Recursion Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Recursion Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

NORTHWELL HEALTHCARE INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NORTHWELL HEALTHCARE INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NORTHWELL is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Recursion Pharmaceuticals and NORTHWELL

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

The idea behind Recursion Pharmaceuticals and NORTHWELL HEALTHCARE 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 Transaction History module to view history of all your transactions and understand their impact on performance.