Correlation Between Healthcare Services and InnovAge Holding
Can any of the company-specific risk be diversified away by investing in both Healthcare Services and InnovAge Holding 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 Healthcare Services and InnovAge Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Services Group and InnovAge Holding Corp, you can compare the effects of market volatilities on Healthcare Services and InnovAge Holding 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 Healthcare Services with a short position of InnovAge Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Services and InnovAge Holding.
Diversification Opportunities for Healthcare Services and InnovAge Holding
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Healthcare and InnovAge is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Services Group and InnovAge Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnovAge Holding Corp and Healthcare Services 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 Healthcare Services Group are associated (or correlated) with InnovAge Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnovAge Holding Corp has no effect on the direction of Healthcare Services i.e., Healthcare Services and InnovAge Holding go up and down completely randomly.
Pair Corralation between Healthcare Services and InnovAge Holding
Given the investment horizon of 90 days Healthcare Services Group is expected to generate 0.66 times more return on investment than InnovAge Holding. However, Healthcare Services Group is 1.52 times less risky than InnovAge Holding. It trades about 0.05 of its potential returns per unit of risk. InnovAge Holding Corp is currently generating about 0.01 per unit of risk. If you would invest 944.00 in Healthcare Services Group on August 28, 2024 and sell it today you would earn a total of 249.00 from holding Healthcare Services Group or generate 26.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Services Group vs. InnovAge Holding Corp
Performance |
| Timeline |
| Healthcare Services |
| InnovAge Holding Corp |
Healthcare Services and InnovAge Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Services and InnovAge Holding
The main advantage of trading using opposite Healthcare Services and InnovAge Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Services position performs unexpectedly, InnovAge Holding 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 InnovAge Holding will offset losses from the drop in InnovAge Holding's long position.| Healthcare Services vs. Pennant Group | Healthcare Services vs. Surgery Partners | Healthcare Services vs. The Ensign Group | Healthcare Services vs. Encompass Health Corp |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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