Correlation Between Sharecare and Definitive Healthcare

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

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

Diversification Opportunities for Sharecare and Definitive Healthcare

-0.26

Correlation Coefficient

Sharecare  Definitive Healthcare

Very good diversification

The 3 months correlation between Sharecare and Definitive is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sharecare and Definitive Healthcare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definitive Healthcare and Sharecare 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 Sharecare are associated (or correlated) with Definitive Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definitive Healthcare has no effect on the direction of Sharecare i.e., Sharecare and Definitive Healthcare go up and down completely randomly.

Pair Corralation between Sharecare and Definitive Healthcare

If you would invest  143.00  in Sharecare on October 22, 2024 and sell it today you would earn a total of  0.00  from holding Sharecare or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Sharecare  vs.  Definitive Healthcare Corp

Sharecare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Definitive Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Definitive Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Sharecare and Definitive Healthcare

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

The idea behind Sharecare and Definitive Healthcare Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.