Correlation Between Definitive Healthcare and Axogen
Can any of the company-specific risk be diversified away by investing in both Definitive Healthcare and Axogen 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 Definitive Healthcare and Axogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Definitive Healthcare Corp and Axogen Inc, you can compare the effects of market volatilities on Definitive Healthcare and Axogen 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 Definitive Healthcare with a short position of Axogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and Axogen.
Diversification Opportunities for Definitive Healthcare and Axogen
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Definitive and Axogen is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen Inc and Definitive 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 Definitive Healthcare Corp are associated (or correlated) with Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Axogen go up and down completely randomly.
Pair Corralation between Definitive Healthcare and Axogen
Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the Axogen. But the stock apears to be less risky and, when comparing its historical volatility, Definitive Healthcare Corp is 1.15 times less risky than Axogen. The stock trades about -0.03 of its potential returns per unit of risk. The Axogen Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 753.00 in Axogen Inc on November 1, 2024 and sell it today you would earn a total of 1,073 from holding Axogen Inc or generate 142.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Definitive Healthcare Corp vs. Axogen Inc
Performance |
| Timeline |
| Definitive Healthcare |
| Axogen Inc |
Definitive Healthcare and Axogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Definitive Healthcare and Axogen
The main advantage of trading using opposite Definitive Healthcare and Axogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definitive Healthcare position performs unexpectedly, Axogen 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 Axogen will offset losses from the drop in Axogen's long position.| Definitive Healthcare vs. National Research Corp | Definitive Healthcare vs. Evolent Health | Definitive Healthcare vs. Simulations Plus | Definitive Healthcare vs. Privia Health Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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