Correlation Between Veradigm and Nextgen Healthcare
Can any of the company-specific risk be diversified away by investing in both Veradigm and Nextgen Healthcare 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 Veradigm and Nextgen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veradigm and Nextgen Healthcare, you can compare the effects of market volatilities on Veradigm and Nextgen Healthcare 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 Veradigm with a short position of Nextgen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veradigm and Nextgen Healthcare.
Diversification Opportunities for Veradigm and Nextgen Healthcare
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Veradigm and Nextgen is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Veradigm and Nextgen Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen Healthcare and Veradigm 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 Veradigm are associated (or correlated) with Nextgen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen Healthcare has no effect on the direction of Veradigm i.e., Veradigm and Nextgen Healthcare go up and down completely randomly.
Pair Corralation between Veradigm and Nextgen Healthcare
Given the investment horizon of 90 days Veradigm is expected to under-perform the Nextgen Healthcare. In addition to that, Veradigm is 1.31 times more volatile than Nextgen Healthcare. It trades about -0.09 of its total potential returns per unit of risk. Nextgen Healthcare is currently generating about -0.05 per unit of volatility. If you would invest 1,893 in Nextgen Healthcare on August 28, 2024 and sell it today you would lose (240.00) from holding Nextgen Healthcare or give up 12.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veradigm vs. Nextgen Healthcare
Performance |
| Timeline |
| Veradigm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nextgen Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Veradigm and Nextgen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veradigm and Nextgen Healthcare
The main advantage of trading using opposite Veradigm and Nextgen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veradigm position performs unexpectedly, Nextgen Healthcare 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 Nextgen Healthcare will offset losses from the drop in Nextgen Healthcare's long position.| Veradigm vs. National Research Corp | Veradigm vs. Definitive Healthcare Corp | Veradigm vs. HealthStream | Veradigm vs. Certara |
| Nextgen Healthcare vs. National Research Corp | Nextgen Healthcare vs. Definitive Healthcare Corp | Nextgen Healthcare vs. HealthStream | Nextgen Healthcare vs. Forian Inc |
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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