Correlation Between Health Catalyst and Medical Cannabis
Can any of the company-specific risk be diversified away by investing in both Health Catalyst and Medical Cannabis 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 Health Catalyst and Medical Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Catalyst and Medical Cannabis Pay, you can compare the effects of market volatilities on Health Catalyst and Medical Cannabis 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 Health Catalyst with a short position of Medical Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Catalyst and Medical Cannabis.
Diversification Opportunities for Health Catalyst and Medical Cannabis
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Health and Medical is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Health Catalyst and Medical Cannabis Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Cannabis Pay and Health Catalyst 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 Health Catalyst are associated (or correlated) with Medical Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Cannabis Pay has no effect on the direction of Health Catalyst i.e., Health Catalyst and Medical Cannabis go up and down completely randomly.
Pair Corralation between Health Catalyst and Medical Cannabis
Given the investment horizon of 90 days Health Catalyst is expected to generate 295.6 times less return on investment than Medical Cannabis. But when comparing it to its historical volatility, Health Catalyst is 66.7 times less risky than Medical Cannabis. It trades about 0.07 of its potential returns per unit of risk. Medical Cannabis Pay is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Medical Cannabis Pay on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Medical Cannabis Pay or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Catalyst vs. Medical Cannabis Pay
Performance |
| Timeline |
| Health Catalyst |
| Medical Cannabis Pay |
Health Catalyst and Medical Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Catalyst and Medical Cannabis
The main advantage of trading using opposite Health Catalyst and Medical Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Catalyst position performs unexpectedly, Medical Cannabis 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 Medical Cannabis will offset losses from the drop in Medical Cannabis' long position.| Health Catalyst vs. National Research Corp | Health Catalyst vs. Certara | Health Catalyst vs. HealthStream | Health Catalyst vs. Forian Inc |
| Medical Cannabis vs. GE HealthCare Technologies | Medical Cannabis vs. Veeva Systems Class | Medical Cannabis vs. M3 Inc | Medical Cannabis vs. Solventum Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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