Correlation Between Black Spade and HealthEquity
Can any of the company-specific risk be diversified away by investing in both Black Spade and HealthEquity 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 Black Spade and HealthEquity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Spade Acquisition and HealthEquity, you can compare the effects of market volatilities on Black Spade and HealthEquity 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 Black Spade with a short position of HealthEquity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Spade and HealthEquity.
Diversification Opportunities for Black Spade and HealthEquity
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Black and HealthEquity is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Black Spade Acquisition and HealthEquity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthEquity and Black Spade 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 Black Spade Acquisition are associated (or correlated) with HealthEquity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthEquity has no effect on the direction of Black Spade i.e., Black Spade and HealthEquity go up and down completely randomly.
Pair Corralation between Black Spade and HealthEquity
Assuming the 90 days horizon Black Spade is expected to generate 43.28 times less return on investment than HealthEquity. But when comparing it to its historical volatility, Black Spade Acquisition is 4.72 times less risky than HealthEquity. It trades about 0.05 of its potential returns per unit of risk. HealthEquity is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 9,595 in HealthEquity on November 1, 2024 and sell it today you would earn a total of 1,339 from holding HealthEquity or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Spade Acquisition vs. HealthEquity
Performance |
| Timeline |
| Black Spade Acquisition |
| HealthEquity |
Black Spade and HealthEquity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Spade and HealthEquity
The main advantage of trading using opposite Black Spade and HealthEquity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Spade position performs unexpectedly, HealthEquity 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 HealthEquity will offset losses from the drop in HealthEquity's long position.| Black Spade vs. Canaf Investments | Black Spade vs. Freedom Holding Corp | Black Spade vs. Cardinal Health | Black Spade vs. HUTCHMED DRC |
| HealthEquity vs. Ollies Bargain Outlet | HealthEquity vs. Appfolio | HealthEquity vs. Grand Canyon Education | HealthEquity vs. Globus Medical |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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