Correlation Between HealthStream and CareCloud
Can any of the company-specific risk be diversified away by investing in both HealthStream and CareCloud 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 and CareCloud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HealthStream and CareCloud, you can compare the effects of market volatilities on HealthStream and CareCloud 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 with a short position of CareCloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of HealthStream and CareCloud.
Diversification Opportunities for HealthStream and CareCloud
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HealthStream and CareCloud is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding HealthStream and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and HealthStream 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 CareCloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareCloud has no effect on the direction of HealthStream i.e., HealthStream and CareCloud go up and down completely randomly.
Pair Corralation between HealthStream and CareCloud
Given the investment horizon of 90 days HealthStream is expected to generate 2.04 times less return on investment than CareCloud. But when comparing it to its historical volatility, HealthStream is 4.36 times less risky than CareCloud. It trades about 0.33 of its potential returns per unit of risk. CareCloud is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 245.00 in CareCloud on August 28, 2024 and sell it today you would earn a total of 51.00 from holding CareCloud or generate 20.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HealthStream vs. CareCloud
Performance |
| Timeline |
| HealthStream |
| CareCloud |
HealthStream and CareCloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HealthStream and CareCloud
The main advantage of trading using opposite HealthStream and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthStream position performs unexpectedly, CareCloud 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 CareCloud will offset losses from the drop in CareCloud's long position.| HealthStream vs. National Research Corp | HealthStream vs. Forian Inc | HealthStream vs. Streamline Health Solutions | HealthStream vs. Definitive Healthcare Corp |
| CareCloud vs. Forian Inc | CareCloud vs. HealthStream | CareCloud vs. National Research Corp | CareCloud vs. Streamline Health Solutions |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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