Correlation Between American Express and Nextgen Healthcare
Can any of the company-specific risk be diversified away by investing in both American Express and Nextgen 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 American Express and Nextgen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Nextgen Healthcare, you can compare the effects of market volatilities on American Express and Nextgen 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 American Express with a short position of Nextgen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Nextgen Healthcare.
Diversification Opportunities for American Express and Nextgen Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Nextgen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Nextgen Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen Healthcare and American Express 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 American Express are associated (or correlated) with Nextgen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen Healthcare has no effect on the direction of American Express i.e., American Express and Nextgen Healthcare go up and down completely randomly.
Pair Corralation between American Express and Nextgen Healthcare
If you would invest 30,202 in American Express on November 8, 2024 and sell it today you would earn a total of 1,813 from holding American Express or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Express vs. Nextgen Healthcare
Performance |
| Timeline |
| American Express |
| Nextgen Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Express and Nextgen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Nextgen Healthcare
The main advantage of trading using opposite American Express and Nextgen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Nextgen 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 Nextgen Healthcare will offset losses from the drop in Nextgen Healthcare's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Nextgen Healthcare vs. National Research Corp | Nextgen Healthcare vs. Definitive Healthcare Corp | Nextgen Healthcare vs. HealthStream | Nextgen Healthcare vs. Forian Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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