Correlation Between Accolade and Goodrx Holdings

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Can any of the company-specific risk be diversified away by investing in both Accolade and Goodrx Holdings 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 Accolade and Goodrx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accolade and Goodrx Holdings, you can compare the effects of market volatilities on Accolade and Goodrx Holdings 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 Accolade with a short position of Goodrx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accolade and Goodrx Holdings.

Diversification Opportunities for Accolade and Goodrx Holdings

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Accolade and Goodrx is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Accolade and Goodrx Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodrx Holdings and Accolade 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 Accolade are associated (or correlated) with Goodrx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodrx Holdings has no effect on the direction of Accolade i.e., Accolade and Goodrx Holdings go up and down completely randomly.

Pair Corralation between Accolade and Goodrx Holdings

Given the investment horizon of 90 days Accolade is expected to generate 3.41 times more return on investment than Goodrx Holdings. However, Accolade is 3.41 times more volatile than Goodrx Holdings. It trades about 0.13 of its potential returns per unit of risk. Goodrx Holdings is currently generating about -0.13 per unit of risk. If you would invest  338.00  in Accolade on October 20, 2024 and sell it today you would earn a total of  351.00  from holding Accolade or generate 103.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Accolade  vs.  Goodrx Holdings

 Performance 
       Timeline  
Accolade 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Accolade are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Accolade exhibited solid returns over the last few months and may actually be approaching a breakup point.
Goodrx Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Goodrx Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Accolade and Goodrx Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Accolade and Goodrx Holdings

The main advantage of trading using opposite Accolade and Goodrx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accolade position performs unexpectedly, Goodrx Holdings 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 Goodrx Holdings will offset losses from the drop in Goodrx Holdings' long position.
The idea behind Accolade and Goodrx Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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