Correlation Between HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY 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 HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHSTREAM and SALTX TECHNOLOGY HLDG, you can compare the effects of market volatilities on HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY 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 HEALTHSTREAM (HL5SG) with a short position of SALTX TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY.
Diversification Opportunities for HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HEALTHSTREAM and SALTX is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and SALTX TECHNOLOGY HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALTX TECHNOLOGY HLDG and HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM are associated (or correlated) with SALTX TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALTX TECHNOLOGY HLDG has no effect on the direction of HEALTHSTREAM (HL5SG) i.e., HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY go up and down completely randomly.
Pair Corralation between HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY
Assuming the 90 days trading horizon HEALTHSTREAM (HL5SG) is expected to generate 1.26 times less return on investment than SALTX TECHNOLOGY. But when comparing it to its historical volatility, HEALTHSTREAM is 3.13 times less risky than SALTX TECHNOLOGY. It trades about 0.12 of its potential returns per unit of risk. SALTX TECHNOLOGY HLDG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 28.00 in SALTX TECHNOLOGY HLDG on October 18, 2024 and sell it today you would earn a total of 3.00 from holding SALTX TECHNOLOGY HLDG or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.78% |
| Values | Daily Returns |
HEALTHSTREAM vs. SALTX TECHNOLOGY HLDG
Performance |
| Timeline |
| HEALTHSTREAM (HL5SG) |
| SALTX TECHNOLOGY HLDG |
HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY
The main advantage of trading using opposite HEALTHSTREAM (HL5SG) and SALTX TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM (HL5SG) position performs unexpectedly, SALTX TECHNOLOGY 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 SALTX TECHNOLOGY will offset losses from the drop in SALTX TECHNOLOGY's long position.| HEALTHSTREAM (HL5SG) vs. MAGNUM MINING EXP | HEALTHSTREAM (HL5SG) vs. Goosehead Insurance | HEALTHSTREAM (HL5SG) vs. REVO INSURANCE SPA | HEALTHSTREAM (HL5SG) vs. Universal Insurance Holdings |
| SALTX TECHNOLOGY vs. SIEMENS AG SP | SALTX TECHNOLOGY vs. Siemens Aktiengesellschaft | SALTX TECHNOLOGY vs. Schneider Electric SE | SALTX TECHNOLOGY vs. Atlas Copco A |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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