Correlation Between Viemed Healthcare and Ardelyx

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

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

Diversification Opportunities for Viemed Healthcare and Ardelyx

-0.42

Correlation Coefficient

Viemed Healthcare  Ardelyx

Very good diversification

The 3 months correlation between Viemed and Ardelyx is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Ardelyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardelyx and Viemed 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 Viemed Healthcare are associated (or correlated) with Ardelyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardelyx has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Ardelyx go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Ardelyx

Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the Ardelyx. But the stock apears to be less risky and, when comparing its historical volatility, Viemed Healthcare is 2.14 times less risky than Ardelyx. The stock trades about -0.14 of its potential returns per unit of risk. The Ardelyx is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  492.00  in Ardelyx on September 21, 2024 and sell it today you would lose (2.00) from holding Ardelyx or give up 0.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Viemed Healthcare  vs.  Ardelyx

Viemed Healthcare

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viemed Healthcare are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting primary indicators, Viemed Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ardelyx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardelyx 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 fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Viemed Healthcare and Ardelyx

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

The idea behind Viemed Healthcare and Ardelyx 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.