Correlation Between InnovAge Holding and Universal Health
Can any of the company-specific risk be diversified away by investing in both InnovAge Holding and Universal Health 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 InnovAge Holding and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnovAge Holding Corp and Universal Health Services, you can compare the effects of market volatilities on InnovAge Holding and Universal Health 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 InnovAge Holding with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnovAge Holding and Universal Health.
Diversification Opportunities for InnovAge Holding and Universal Health
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between InnovAge and Universal is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding InnovAge Holding Corp and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services and InnovAge Holding 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 InnovAge Holding Corp are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of InnovAge Holding i.e., InnovAge Holding and Universal Health go up and down completely randomly.
Pair Corralation between InnovAge Holding and Universal Health
Given the investment horizon of 90 days InnovAge Holding Corp is expected to under-perform the Universal Health. In addition to that, InnovAge Holding is 1.51 times more volatile than Universal Health Services. It trades about -0.4 of its total potential returns per unit of risk. Universal Health Services is currently generating about 0.17 per unit of volatility. If you would invest 18,072 in Universal Health Services on October 24, 2024 and sell it today you would earn a total of 806.00 from holding Universal Health Services or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnovAge Holding Corp vs. Universal Health Services
Performance |
| Timeline |
| InnovAge Holding Corp |
| Universal Health Services |
InnovAge Holding and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnovAge Holding and Universal Health
The main advantage of trading using opposite InnovAge Holding and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnovAge Holding position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| InnovAge Holding vs. The Ensign Group | InnovAge Holding vs. Select Medical Holdings | InnovAge Holding vs. Encompass Health Corp | InnovAge Holding vs. Enhabit |
| Universal Health vs. The Ensign Group | Universal Health vs. Addus HomeCare | Universal Health vs. Encompass Health Corp | Universal Health vs. Surgery Partners |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |