Correlation Between HealthEquity and R1 RCM
Can any of the company-specific risk be diversified away by investing in both HealthEquity and R1 RCM 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 HealthEquity and R1 RCM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HealthEquity and R1 RCM Inc, you can compare the effects of market volatilities on HealthEquity and R1 RCM 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 HealthEquity with a short position of R1 RCM. Check out your portfolio center. Please also check ongoing floating volatility patterns of HealthEquity and R1 RCM.
Diversification Opportunities for HealthEquity and R1 RCM
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HealthEquity and RCM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding HealthEquity and R1 RCM Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on R1 RCM Inc and HealthEquity 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 HealthEquity are associated (or correlated) with R1 RCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of R1 RCM Inc has no effect on the direction of HealthEquity i.e., HealthEquity and R1 RCM go up and down completely randomly.
Pair Corralation between HealthEquity and R1 RCM
Considering the 90-day investment horizon HealthEquity is expected to generate 55.44 times more return on investment than R1 RCM. However, HealthEquity is 55.44 times more volatile than R1 RCM Inc. It trades about 0.29 of its potential returns per unit of risk. R1 RCM Inc is currently generating about 0.5 per unit of risk. If you would invest 8,782 in HealthEquity on August 29, 2024 and sell it today you would earn a total of 1,575 from holding HealthEquity or generate 17.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.27% |
| Values | Daily Returns |
HealthEquity vs. R1 RCM Inc
Performance |
| Timeline |
| HealthEquity |
| R1 RCM Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
HealthEquity and R1 RCM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HealthEquity and R1 RCM
The main advantage of trading using opposite HealthEquity and R1 RCM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthEquity position performs unexpectedly, R1 RCM 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 R1 RCM will offset losses from the drop in R1 RCM's long position.| HealthEquity vs. Ollies Bargain Outlet | HealthEquity vs. Appfolio | HealthEquity vs. Grand Canyon Education | HealthEquity vs. Globus Medical |
| R1 RCM vs. National Research Corp | R1 RCM vs. Definitive Healthcare Corp | R1 RCM vs. HealthStream | R1 RCM vs. Evolent Health |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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