Correlation Between HealthStream and TransMedics
Can any of the company-specific risk be diversified away by investing in both HealthStream and TransMedics 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 TransMedics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HealthStream and TransMedics Group, you can compare the effects of market volatilities on HealthStream and TransMedics 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 TransMedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HealthStream and TransMedics.
Diversification Opportunities for HealthStream and TransMedics
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HealthStream and TransMedics is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding HealthStream and TransMedics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransMedics Group 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 TransMedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransMedics Group has no effect on the direction of HealthStream i.e., HealthStream and TransMedics go up and down completely randomly.
Pair Corralation between HealthStream and TransMedics
Given the investment horizon of 90 days HealthStream is expected to generate 2.62 times less return on investment than TransMedics. But when comparing it to its historical volatility, HealthStream is 4.83 times less risky than TransMedics. It trades about 0.14 of its potential returns per unit of risk. TransMedics Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,235 in TransMedics Group on November 1, 2024 and sell it today you would earn a total of 318.00 from holding TransMedics Group or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
HealthStream vs. TransMedics Group
Performance |
| Timeline |
| HealthStream |
| TransMedics Group |
HealthStream and TransMedics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HealthStream and TransMedics
The main advantage of trading using opposite HealthStream and TransMedics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthStream position performs unexpectedly, TransMedics 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 TransMedics will offset losses from the drop in TransMedics' long position.| HealthStream vs. National Research Corp | HealthStream vs. Forian Inc | HealthStream vs. Streamline Health Solutions | HealthStream vs. Definitive Healthcare Corp |
| TransMedics vs. Inspire Medical Systems | TransMedics vs. Inari Medical | TransMedics vs. InMode | TransMedics vs. Insulet |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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